Eric Vinores, a certified financial planner from Thurmont, Md., estimates that about 85% of producers don’t have a transition plan in place. As for the remaining 15%, the transition plan is likely out of date.

What stops producers from getting a plan on paper in the first place? It’s not lack of education. “It’s other challenges of just not knowing where to begin,” Vinores said at the recent Maryland Commodity Classic in Centreville. “The only way to do it is one step at a time. You have to take it in pieces.”

A farm and what becomes of it when the owner dies is a complicated process. It’s one that requires planning and looking past the idea that a written will takes care of everything. Having a transition plan, Vinores said, enables you to look at multiple aspects of the business, from who takes over the farm to possible tax implications and ensuring legal documents are in order.

“When it comes to farming, generally speaking, a typical estate plan will often lead to terrible results because of the many complexities and challenges,” he said.

Here are some points to remember:

A will may not be enough. There are certain things a will can do and can’t do, Vinores said.

Wills take an estate’s assets and divide them based on the wishes of whom the will is written for. Once that process is complete, contract law takes over. So, whomever you name as a beneficiary on anything — for example, your 401(k) or bank accounts — will supersede what’s written in the will.

It goes even further when you talk about the farm and think about who will take over the operation, who gets the equipment, and who will be responsible for land leases and other contracts.

All these are important to think about, Vinores said, because the typical estate process just divides everything into equal chunks for each heir. For example, if you own 300 acres and you have three children, each child will get 100 acres — known as “tenants in common.” This can create a problem, he said, if one child is not interested in the farm and just wants to cash out.

“So, they may force one of the siblings to buy them out. That tenants in common is a big hurdle that needs to be addressed,” Vinores said.

Another thing to remember is that leases and obligations don’t go away once you die. For example, if a new piece of equipment is bought just before you die and only one child is actively farming, and this is not addressed in the estate documents, the loan then becomes the responsibility of each heir, even one who isn’t farming.

“This might lead to selling assets, so make sure you are addressing this through your estate documents,” Vinores said. “None of these a will can resolve. This is why we say that a transition plan is far more important than an estate plan. A will is not going to resolve everything,”

Develop your plan and team. When developing a transition plan, Vinores said to bring in people — Extension educators, accountants, attorneys and others — who can focus on different aspects of the business and provide advice on what your needs are.

Setting goals and figuring out who may take over the farm are crucial items to put on paper, but also remember that these things can change, he said.

“Analyze everything and look over options and solutions,” Vinores said. “There is not a cookie-cutter strategy to have an effective transition plan. Every business operates differently, let alone every family.”

Once you know who will likely take over, make sure they are on the same page.

“Does your successor, it is truly what they want? Both of you have to be on the same page there, and if you can’t define where you want to be next year, it becomes even harder to look five years out, 10 years out,” he said.

Things that should be included. Transition plans can include a lot of things, but five items are especially important, Vinores said:

Implementing the plan. This is another roadblock for producers who haven’t written a transition plan, but Vinores said to keep things simple.

“I would say the best thing you could do is create a checklist or a timeline. You’re plotting that path forward to get from point A to Z, and going through multiple stops along the way,” he said. “Each time you are few steps in, maybe it alters what you haven’t thought about previously. But you need to figure out what’s your biggest priority.”

Even if you can’t afford the best advisers or have time to put together the best team for your farm’s transition, the most important thing, he said, is to have your wishes down in writing.

“So, anything you can do to preserve that family harmony so people will continue to gather in the family house is a great thing to do,” Vinores said. “What’s the best thing you can do as the older generation? Make your wishes known. It is easy for kids to bicker about what they think their parents wanted. This will lead to open communications between everybody.”