Imagine that you’ve decided to retire and transition the farm to the next generation. You may have an idea of what you want your legacy to be – but what needs to be addressed in your plan?

There are a couple different components when it comes to getting the right estate plan in place for your farm. When those facets are figured out, you can feel more secure knowing you have a plan for the legacy you want to leave.

Succession plan

One of the key parts of a strong legacy plan for the farm is a clear understanding – for both the older and younger generation – of who will lead the farm in the future. That person needs to be preparing themselves for the job. They need to be aware of what they will be dealing with and practicing leadership behaviors now.

Who is the future leader of your farm? Are they a family member or someone else? How have you determined that they’re well-suited to lead the farm – that they have the right default behaviors?

Is there a plan and timeline for how they will move into the leadership role? What intentional training are you doing with them so they can learn from you? What skills are they building that will serve them well in the farm leadership role?

Estate plan

Another key part of a well laid out legacy plan is to figure out how the operation’s assets will be transferred. First, you need to look at your options for how you’d like to leave an inheritance to the next generation.

There are issues to address here, especially when you have both farming and non-farming children. The concepts of sweat equity and ‘fair versus equal’ are important to consider. It may be particularly helpful to have a non-family guide for these conversations, such as a legacy advisor.

Once you’ve decided what you want, then it’s time to get legal documents in place. Because of the unique nature of family farm businesses, it’s important to work with an estate planning attorney who has a strong background in ag estate planning.

Putting it all together

Do you currently have an estate plan in place? On a scale of 0 to 10, how confident are you that your plan will allow you to leave the legacy you want to leave? How comfortable are you with your potential income during retirement? If you’re a member of the next generation on the farm, how confident are you in your inheritance?

The way that you answer these questions should make you feel more confident in the plan you have in place – or maybe they’ve generated some new questions in your mind. Make sure you get your questions answered. Someone who is well-versed in helping farm families create plans for the future they desire for their farms, such as a legacy advisor, can help guide that process.

Read about one family’s farm transition journey, plus more on how to protect the family farm during a transition, in the Smart Series publication.

The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.