A solid succession plan’s like a roadmap – it helps outline where your farm is headed.
No one’s going to blame you if you don’t feel like talking about your farm’s succession plan. Your farm’s more than a business, it’s your way of life and it’s hard to think that one day, you’ll need to pass it off. Even though it might not be comfortable, it’s not something you only need to consider, it’s something you really need to plan for.
Avoiding your succession plan isn’t going to make it go away. In fact, it’s never too early to get started. Planning for succession can take years as you work through the ins and outs of your business, making considerations for your family as well as your employees.
Here’s a few things you and your family will want to consider:
- How much involvement or control, if any, you’ll want after you retire. Will you want to continue managing the farm in some capacity or maybe maintain ownership of some of the assets? How long would you want to do that?
- When and how you’ll sell or transfer ownership to a family member. Will you use an interim arrangement or proceed with a full sale when you retire?
- Where you’ll live. Will it be on the farm or somewhere else?
- How you’ll transfer assets to your kids who aren’t planning to take over the farm.
- Setting financial goals and priorities for your farm profits. This could be paying down debt, paying income tax or investing back into the farm.
While succession planning isn’t easy, you don’t have to do it alone. Good advice from qualified professionals can help make your decisions a whole lot easier. Here are some great places you can get good advice:
- A financial or estate planner who specializes in farm estate planning.
- A lawyer who specializes in tax law.
- An accountant who has access to your income records and projections for your business.
- Agricultural experts, like those we have at Affinity, who can help navigate the dollars and cents of your retirement.
Handing the farm off to the next generation can be tough, but careful, long-term planning can lighten the load, give you some peace of mind and avoid family conflict. When everyone knows the plan, there’s a lot less room for surprises.