Finding the time to talk with your family about succession planning for your farm can be difficult. You may also feel uncomfortable just thinking about selling your farm or delegating control to members of your family.
What You Should Know in Advance About Succession Planning for Your Farm
Take time to develop an efficient transition plan for your agricultural businesses. You will help ensure that your family’s wishes are met and minimize emotional stress.
A succession plan may include:
- The transfer or sale of property to a member of the designated family. To be fair to heirs not related to the farm, you can leave them equal shares of money, stocks or other assets.
- The liquidation of assets of the farm, such as auction equipment and livestock, or the sale of land.
- The rental or lease of land or equipment.
- The sale or leasing of property.
Determine the Desired Result
Concentrate on the desired results of the succession. Among all the important questions, you should ask yourself:
- What future do we visualize with my spouse for the farm?
- Do I want to participate with smaller-scale operations?
- What kind of income would I need to retire or for healthcare costs?
If any member of your family wanted and could take over operations, you can relax because that person has the knowledge and ability to operate the farm profitably.
Ethical Wills
An ethical will is created from the values and core beliefs that grow a family. Creating an ethical will is free, useful, and straightforward. In one or two pages you can explain how you envision the future of your farm and your family’s participation in succession planning for your farm. It acts as a road map for your heirs, showing them a path to success and happiness on the farm.
Ward off Failure
To ensure the continued success of your farm, it’s essential to take preventive measures to ward off failure. Always take into account the following risks:
- Inadequate cash flow
- Settlement of some assets for retirement
- Leaving the farm to someone unreliable or not ready and willing to lead or manage the farm
It is important to include the help of qualified professionals who have no interest in final decisions. They can help you make accurate and objective decisions for your farm’s succession. Among the qualified professionals we can include:
- A wealth or financial advisor who specializes in planning farm succession
- A moderator or referee to help with family discussions
- A bank that helps with financial resources
- Your accountant, who has the income records and projections of your business
- Your personal lawyer, or one who specializes in tax issues
- Your farm insurance agency
We want to help you make the best decisions for your farm and your family, now and in the future. Call us, Wathen Insurance, at 765-676-9666, and we can discuss the necessity of crop insurance in your succession plan. Protect the farm every year with crop insurance.
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