What to do in the waiting room
Don't stop planning while you're waiting to see how policy changes affect your farm.
What do you think of when you hear “waiting room”? Often when we think of a waiting room, we think of going to the doctor and waiting for them to check out something that’s possibly wrong with us or waiting for someone to come out of surgery. In reality, life is full of “waiting rooms.” You might be on hold for a phone call or you might be waiting for an opportunity to buy land or waiting to see which heirs will farm. You might be waiting to hear how a divorce proceeding ends up. You might be waiting for it to rain again or waiting for machinery parts. You might be waiting for a life insurance offer or waiting for an attorney to get paperwork done.
As I write this, we are still waiting for the election to end, which could have an enormous effect on farm estate planning. Going into the election and now in the weeks following the election, I have received a large increase in phone calls from some very concerned farm families because they want to understand how things could change to estate tax limits, stepped-up basis and tax levels in general.
So here’s the real question. What do you do while you’re in the waiting room? Sometimes the phrase “waiting room” has a negative connotation. It feels like a room full of wasted time when you just sit and do nothing. I prefer to put a positive twist on it: A substitute for “waiting room” might be “preparation room.” You could be developing a strategy to go in multiple directions when the wait is over. You could be praying for help to deal with what you might hear. You could be asking questions and learning about options so that you can pivot to go "this way" or "that way" when the wait is over.
It always seems ironic to me when I hear someone complaining about waiting, and then a great opportunity comes by and they are not ready. Waiting should not mean doing nothing. Waiting can be a great opportunity to get ready.
Right now, we still waiting to know how planning will need to be adjusted, if at all, based on the election results. The question for you is, are you ready to adjust your plan for possible gifting or have you thought of ways to reduce the value of your estate in a short period of time? Here are a few questions to think about:
- If you were going to give assets away at this time, which assets would they be?
- How can you use both your credit and your spouse’s credit most wisely?
- How would gifting affect your income?
- Is there a chance that you regret giving assets away more than you would regret paying tax on the transfer?
- Are you getting good advice? This is the time when “razzle-dazzle” planners will show up and capitalize on your fears in the waiting room.
If the election is completely over by the time you read this, understand that means we have now entered a new waiting room for the next election. The bottom line is that we’re always in the waiting room somewhere or for something, but life doesn’t stop and neither should you. When you’re in the waiting room, just use that as an opportunity to continue preparing.
Join me again Jan. 11 at 6 p.m. as I do another Zoom meeting speaking about this and other farm estate planning issues. For more information and to register, go to farmestategps.com/AW-JAN11-2021 .
Myron Friesen is the co-owner of Farm Financial Strategies Inc. in Osage, Iowa. He can be contacted at 866-524-3636 or firstname.lastname@example.org.