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Farm succession planning: Just do it. NOW!

Farm succession planning: Just do it. NOW!
The most important step in farm succession planning is to begin

Well begun is half done – Aristotle

Families across the nation continue to dream of the day the farm will pass to the next generation. Let's face it, the process of creating a farm succession plan is a daunting task. Many do not see it as a comfortable process. In fact, the feeling of being overwhelmed is common place.

Why bother planning? What difference does it make? Why start now?

Do these questions sound familiar? Take our advice and start at the beginning. It's never too early or too late.

The most important step in farm succession planning is to begin (Thinkstock/SharonCobo)

Here is some good advice from Minnesota attorney Scott Miller. He has an extensive resume, teaching continuing education courses for financial advisors, insurance agents, accountants, farm business managers and business managers.

First, take the time to find out how each family member views the farm or business. Talk with them all – those actively involved in the farming operation and those not actively involved. For those who are active on the farm, allow each person to express their personal and professional goals and expectations with the farm business. The idea and goal is to strengthen the understanding of each other's viewpoint and avoid misunderstanding and conflict within the family.

Second, give the younger generation a history lesson of the farm business. How did it start? How long has it taken to get to this point? What were the biggest challenges to overcome? This will assist the younger generation to better understand how the farm business grew to its present state and is currently operated. The entire family will come away from this discussion with a much clearer view.

Third, choose a team of qualified professionals to assist farm succession planning and bringing the plan to fruition. These individuals can assure the correct decisions are made based on the goals of the family members involved in the planning. The team should include a financial advisor, accountant and an estate planning or farm succession planning attorney.

Finally, listen and give consideration to parental goals, the farm business goals and the goals of the succeeding family members. Failure to setup a succession plan often results from a lack of information about where to begin, what items to include, and who to turn to for assistance. A team of trusted professionals can be invaluable in assisting the family in progressing with plan development.

The bottom line: A good family farm or business succession plan must balance the wants and needs of everyone involved in the operation. While balance is not a simple thing to attain, working with a top notch team of professionals and having open discussions with the family can go a long way toward creating the desired succession plan for passing on the farm.

If this blog has got you thinking about your own situation, get in touch with my office (rdunn@dunncrekadvisors.com). Miller can be reached at Scott.miller@millerlegal.com.

The opinions of Rich Dunn are not necessarily those of Farm Futures or the Penton Farm Progress Group.

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