Farm Succession Planning
The family farm. It’s your legacy and your American dream. And it means everything to you. Passing that dream on to the people you trust helps ensure your hard work continues to provide for generations.
Farm succession planning plays a key role in securing your legacy. It’s a detailed, sometimes emotional, process. But when the right people are involved and the right conversations take place, it can be a positive experience that strengthens relationships and protects dreams.
What Is Succession Planning for a Farm?
A farm succession plan is a transition strategy to pass on your farm as smoothly as possible. If you plan on passing your farm onto the next generation, you’ll want to prepare them for success by planning ahead. That’s where a farm succession plan comes into play.
What to Know About Succession Planning for Your Farm
Use these 7 proven steps to build a farm succession plan you can feel good about:
Start sooner. The earlier you start your plan, the more time you give yourself to make smart decisions and include the right people. And starting sooner helps you avoid rushing through any of the important steps.
Ask the right questions. Asking a few key questions can help you think through what matters most. Here are some of the questions to consider:
- Is it important that your farm stays in your family’s possession?
- Do you want the farm to remain operational after the transition?
- After the transition, do you want to stay involved in business decisions regarding the farm?
Stay committed. An effective farm succession plan doesn’t happen overnight. It’s a process that requires the commitment of every person involved. Knowing that up front will help keep everyone engaged.
Communicate clearly. Open and honest communication is the foundation of any effective succession plan. Talking through the concerns, dreams and assumptions of everyone at the table, will go a long way towards preventing any misunderstandings.
Enlist the experts. Succession planning can get complex. There are tax laws, financial strategies, and real-life relationships to think about. It’s a good idea to involve professionals. Consider building a team that includes a lawyer, accountant, financial planner and your American Family Insurance agent. With expert guidance you’ll be on a better path to a successful transition.
Put the plan on paper. It might seem obvious, but getting all the details down on paper is a very important step. Outline the details of who is to inherit what, when it’s all going to happen and the process to achieve it. Make sure all parties are on the same page. Then, have everybody sign off on the final agreements.
Review and adjust. People and circumstances could change along the way. Review your plan and insurance beneficiaries yearly and make necessary adjustments to make sure everything is up to speed.
There’s a lot to think about, but it doesn’t have to be overwhelming. With the right guidance and support you can create your succession plan and gain peace of mind you're protecting your farm and its future.
Related Topics: Farm Succession Plan