Your Farm’s Future

Teresa Olson
By Teresa Olson December 11, 2017 15:46

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As you finish your harvest for the year and put your equipment away, it could be the perfect time to start planning for the future.  Succession planning helps ensure that your farm will one day be passed on to the next generation instead of going out of business, being absorbed by larger neighboring farms, or getting sold for non-farm use.  Without a succession plan, state law dictates how the farm and its assets are distributed, and that’s not exactly what a family might prefer.

Working through a wealth strategy such as this will take time, patience and commitment.  It should involve meetings with family members, an attorney, accountant, agricultural banker, investment advisor, and insurance agent.  There may be conflicts, and it might be helpful to ask one these non-family professionals to serve as a meeting facilitator.  They could provide unbiased and objective viewpoints to help lend perspective and neutralize potential disagreements.

Marlene Bradbury has several years’ experience working for AgCountry Farm Credit Services as a succession and retirement planning consultant.  Here are 11 things she suggests you NOT do:

  • Don’t think planning isn’t for you. It’s for everyone no matter their age or the size of their operation.  It will protect your assets and ultimately affects the bottom line.
  • Don’t stop with a will. Include a durable power of attorney, health care directive, and other trust documents.
  • Don’t let documents get out of date. Things like a birth, death, marriage and divorce need to be considered with respect to updating your succession plan.
  • Don’t keep your plans a secret. Make sure you communicate your intentions with your family so you can avoid unnecessary stress, anxiety, and misunderstandings down the road.
  • Don’t leave out your team. Include trustworthy officials, pertinent family members, and a third-party mediator if necessary.
  • Don’t confuse equal and fair. Carefully consider how you designate options and rights (each are different) to each beneficiary.
  • Don’t make assumptions. They need to be talked about before they turn into arguments.   It’s important that everyone at the table is committed to the future of the farm.
  • Don’t forget to be realistic. How many families can your farm really support?
  • Don’t rush. This process is a journey, and taking 5 to 10 years to allow transition to occur helps incoming generations gain the skills and confidence they need.
  • Don’t gift without documenting. If something happens to the giver or receiver, documentation (i.e. a bill of sale-even if there is no monetary exchange) is the best way to make sure wishes are clear.
  • Don’t delay. Starting the process now gives you peace of mind and is one of the best gifts you can give your family.

Beginningfarmers.org listed some very helpful resources that can be used to start the planning process.  Log on to http://www.beginningfarmers.org/farm-succession/ . Here’s also a link for a great step-by-step checklist and action plan:  https://www.farmanddairy.com/columns/what-to-do-in-winter-checklist-to-farm-succession/318148.html

 

Remember, succession means success, and a sure future for your family and your farm.

 

Terry Olson, Titan Outlet Store Team

 

References:

https://www.agriculture.com/farm-management/estate-planning/11-don-ts-of-succession-and-retirement-planning?utm_source=ag-newsletter&utm_medium=email&utm_campaign=todaysnews_120417&did=197366

https://www.pnc.com/en/small-business/business-insights/agriculture-enews/management/succession-planning-for-farms.html

 

Teresa Olson
By Teresa Olson December 11, 2017 15:46
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