Heath Osborn, despite experiencing limited mobility from a surgery that placed rods in his back, continues to operate his farm through the use of devices like lifts for his tractors and the aid of crutches for walking. With the help of Nebraska AgrAbility, his farm was assessed and he was connected with resources to continue his work safely and effectively.

While many focus on estate and transition planning for a farm or ranch in the event of the primary operator’s death, an essential factor often overlooked in planning is accounting for disability. Jessica Groskopf, a University of Nebraska Extension educator and agricultural economist, notes this process can be challenging given the uncertainties of the severity and duration of the disability. Nevertheless, she suggests several key steps to ensure you and your farm or ranch are protected in case of disability.

Firstly, a labor contingency plan is necessary. Consider who will be tasked with the additional work, either on a short-term or long-term basis. This plan may involve cross-training all employees in multiple roles within the operation and being financially prepared to outsource or hire extra labor when required.

Next, an emergency fund is advised. Disabilities often bring with them unexpected medical expenses and potential loss of income. Financial advisors typically recommend saving 3-6 months of expenses in a readily accessible account for emergencies.

Protecting your farm or ranch assets from individual medical debt can be achieved by setting up the operation as a legal entity like an LLC or S corporation. This structure can protect the assets from creditors in the event of a medical emergency that precedes the disability.

Additionally, putting a Power of Attorney (POA) in place is crucial for allowing a trusted individual to make business and financial decisions on your behalf in case you are incapacitated. This authority could also encompass specific situations such as mental incapacity, and each member of the operation should have a POA.

Living wills or Advanced Medical Directives can be set up to specify the kind of medical care you wish to receive when you are incapable of making such decisions. This arrangement should be coupled with the appointment of a Power of Attorney for Healthcare, separate from the individual handling your business affairs.

Provision for disability in a buy-sell agreement is similarly important. Legal documentation should define the terms for transfer of assets in the event of disability, not just death.

Finally, consider disability insurance. However, the suitability of such insurance for farmers and ranchers is debated. Alternatively, Social Security may provide disability benefits under specific conditions regarding payment of Social Security/Self Employment taxes.