Our only son and his wife currently own 30% of our farming corporation. My wife and I own the rest. Within five years we would like to transition the rest of it to them. How do we do that in the most efficient manner?

The Profit Planners panel answering this question includes: David Erickson, farmer, Altona, Ill.; Mark Evans, Purdue Extension educator, Putnam County, Ind.; Steve Myers, farm manger, Busey Ag Resources, Leroy, Ill.; and Chris Parker, forage and livestock producer, Morgantown, Ind.

Erickson: You need the advice of professionals experienced in matters of business transition, estate planning and business development. An attorney, accountant and banker are good folks to start with. Get people who can be the most help to you through their expertise and experiences, not because you have used their services in the past. Keep in mind that future business success for your son and daughter-in-law is important, but so are your financial needs for retirement. I encourage you to develop a written plan to help guide your successful completion of this extremely important transition.

Evans: Succession planning is very important, and it’s good you’re looking ahead. Make sure that if there are other children, the process is transparent and open within the family. It is very sad to see families split and hurt in the transition process. Attend succession planning programs offered by Extension, and seek input for questions to ask and thoughts to consider. Work with your tax accountant. If there are sensitive family issues, a legal counsel review may be necessary to consider, as well.

Myers: It is time for that conversation. It first includes your wife, son and daughter-in-law. If they’re ready, willing and able, make sure your accountant, attorney and other professional team members are consulted and are on board. Make the decision and put the plan in place. Then adjust it as necessary over time.

Parker: Obviously, you will need to talk with your son and wife, along with an accountant and lawyer, as you do this. It seems reasonable to me to transition a portion of the remaining corporation each year over the next five years, with an eye on tax consequences. You might also want to look at a new business model, perhaps a limited liability company. Checking with your Extension farm business management specialist would help you understand the business transitioning options you have before you start the overall process.

Summing up: All panelists commend you for looking to the future now. The transition process should start with a discussion with your wife, son and daughter-in-law. Involve an accountant, attorney and perhaps an estate planning specialist early in the process. Your local Extension service may have information or a specialist who can offer advice and suggest alternatives. You indicated that you have only one son, but you didn’t specify if you also have daughters. If so, the panelists emphasize that it’s important to involve them and perhaps their spouses. They need to know they will be treated fairly. You also need to make sure that while helping your son get a stronger foothold in farming, you still protect your retirement needs. The bottom line seems to be start now, communicate with all parties, and seek both professional and free help to put together a workable written plan.