Good estate planning takes a team, experts say
By CAROL RYAN DUMAS
When it comes to estate planning, people with family businesses need more than just a will. They need an integrated strategy and a team of professionals.
And they need to understand that the business and the financial environment are dynamic, are always changing, and their business strategy needs to be open to those changes, said David McAnaney, an attorney specializing in business, estate and tax planning, located in Boise.
His firm, McAnaney & Associates, specializes in working in concert with clients and their other advisers to efficiently and creatively develop, refine and execute strategic plans focused on long-term success.
The law firm has about 200,000 farm and ranch clients across the United States and stresses the importance of planning for the future and doing it through a collaborative approach, McAnaney told producers at the Idaho Cattle Association annual convention in Sun Valley on Tuesday.
"Failure to plan is a plan to fail," he said.
Family farms and ranches have a huge amount of assets tied up in the business. But most farmers and ranchers spend so much time in the business, they aren't spending any time on the business, he said. "That's why so many businesses don't make it to the second and third generation."
Ranchers have survived because they have been able to look down the road, anticipate what's coming and adapt to change. It's the same with estate planning, said Larry Gabbitas, certified financial planner with Mass Mutual Financial Group in Boise.
Good strategy is not about today or tomorrow; it's about what's going to happen down the road, he said.
A big part of the problem is that people don't know who to talk with, McAnaney said.
They might talk with attorneys, CPAs, financial planners or insurance representatives, but most of the time, those advisors really don't understand the family business. So they're coming away not getting what they need and not knowing what their plan does, he said.
"At the end of the day, the client doesn't know what he has. That's not strategy; that's tactics," he said.
There are universal tools everyone uses in estate planning, but they don't work in every situation, Gabbitas said.
"It's not one size fits all. You build a plan then use the tools to accomplish the strategy. If we can see what the puzzle looks like, we can help you," he said.
Both Gabbitas and McAnaney say they ask clients a lot of questions to ascertain what the client wants his financial and estate plan to look like when it's done.
"We talk to people about things they don't talk to anyone else about. If you can get questions answered, you have a much better plan," McAnaney said.
He gets to know his clients' operations and their families and works with the clients' other advisers to make sure there are no holes in the strategy to protect wealth for the next generation, he said.
"Collaboration is a critical part of good planning. You have to build a team of professionals who understand what you're going through," he said.
Lack of a good strategy can lead to devastation, loss of lifestyle, liquidation to pay taxes or other heirs and family dissension, and he's witnessed some tragic outcomes for families that didn't have a good plan, he said.
Even those who have a good estate plan in place need to review the strategy regularly, at least every two years, he said.