Set to succeed

MAREN DELANEY

There is no time like the present to plan for the future.

The North American Farm & Power Show in Owatonna is beginning its schedule of seminars with the Farm & Business Succession Planning presentation at 10 a.m. March 19. The seminar will be given by Leah R. Gilbert of Gilbert Legal, PLLC, who said she not only enjoys giving advice and answering questions on maintaining a solid succession plan but also likes hearing the stories of when a good plan went well.

“Everyone should have a plan,” Gilbert said. “It should be individualized based on their situation, their family dynamics and, most importantly, their goals.”

Raised in a small town in southwest Minnesota, Gilbert came from a family of bankers, later working in a bank and on a bank’s board of directors. In that capacity, she came to understand farming from its financial and succession-planning sides. Gilbert has been doing estate planning for about 16 years so far, working with disability planning, end-of-life planning, tax planning, plan administration and more.

It is important for her Gilbert said to ensure the succession plans fit the individual clients.

“Cookie-cutter plans don’t work when we’re dealing with farm and business succession planning,” she said. “I joke that farmers never truly retire, so the planning should cover any situations that arise unexpectedly or at death for both the operation and the assets. We want a plan that actually works.”

Gilbert said she has seen many plans lead to problems for a variety of reasons, from people not reviewing their plans, updating their language or laying out their goals, to other family members putting a dollar sign on buyouts instead of a formula.

In planning, people’s priorities can range from business-focused to family-focused Gilbert said. One of the main things Gilbert said she enjoys about estate planning is the fact that every situation is very different, and so having a succession plan allows the farm or business owner to have security and control while minimizing conflict. It provides stability not only to families and businesses but often to neighborhoods and communities.

“People will come to me after they’ve seen one of these horror stories play out where someone didn’t want to make decisions or didn’t have a plan,” Gilbert said. “Not having a plan is a type of plan, but it’s not one I’d recommend because then, we’re just going with what the default says. … Fair does not mean equal in my world, so doing the plan that’s going to work best for you will be the plan you’ll want to do.”

Once a plan is made, the most common mistake Gilbert said she sees with it is a lack of maintenance, not reviewing and updating it as life changes.

“That’s sometimes the biggest issue,” she said. “I’ve updated plans created decades ago with set dollar amounts for buyouts (and) the current valuation is significantly higher today. If that plan were to be enforced, one party isn’t going to have the outcome that was originally intended. … (Succession planning) is not one-and-done, especially when there are moving pieces and potentially adding other people who are going to be participating.”

Gilbert has given presentations at the NAFPS for about 10 years so far. She said her most commonly offered piece of advice at these events is for attendees to simply go and see what is in writing, whether they have a farm, business or personal plan.

“I’ve had some where memory skews what you think you wrote down,” Gilbert said. “Unfortunately, we can’t do business on a handshake, so go back and look at who you have making your medical and financial decisions if you’re no longer able, who is participating in the plan and who inherits. … Review the plan with significant changes in health or living situation or every couple of years to ensure the goals match the plan.”