If you are at a point in your farm career where think you need to do some estate planning, my first two blogs in this series may have sparked your deliberations. This is part three of our list of questions that can help you decide if the time is right for a farm business transition.
11. Are all participants, including spouses, willing to be involved in decision making regarding work tasks, hours, vacation, finances and family expectations?
12. Are all parties willing to start with a trial period of working together, through a wage agreement or farming independently while sharing resources, for a year or two before starting a formal arrangement?
13. Are the parents willing to provide security to the entering parties by agreeing to a buy/sell agreement and allowing the entering party the right to purchase assets in the future? The agreement should be binding on other heirs.
14. Are the parents willing to sell, lease, gift or otherwise transfer assets to the entering party at perhaps less than current market values?
15. Are the parents not only willing to transfer farm assets, but are they willing to transfer management of those assets to the entering generation?
If you can answer "Yes" to nearly all of these questions, you should look for my next blog and a few more questions. If you answered "No" to any question, you may wish to evaluate the situation before you proceed.
In some cases, you will need the help of trusted advisors to answer these questions. It's another reminder of the value of fee-only, fiduciary financial planning advice during this process.
If this article has you thinking about your own circumstances, contact my office at firstname.lastname@example.org.
The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.