Editor’s note: From the monthly management column, Estate Plan Edge.

No matter how much they love farming, every farmer eventually leaves the business. What is your exit strategy? Do you cross your fingers and hope that when you finally decide to retire - or die - someone in the family will simply pick up where you left off? That seems a little careless for something as close to your heart as your farm and your family, don’t you think?

A successful succession plan is the intentional transition to new management of the livelihood you presently manage. It should help you accomplish these goals:

• control the business

• decide who will benefit from it

FOCUS: Your estate plan is a great place to begin formalizing your succession plan. Not because you aren’t quitting until you die - even if that is your intention - but because it helps you focus.

• provide an environment in which successors will learn and earn the business

• transfer control and capital to successor when the time is right

• protect investment from unnecessary taxes and risk.

Begin with the end in mind. Your estate plan is a great place to begin formalizing your succession plan. Not because you aren’t quitting until you die—even if that is your intention—but because it helps you focus. Start with a reality check: “What would they do without me?”

If you become disabled or die, the transition will be forced upon your family, ready or not. Are you satisfied with how that will play out?

Then clarify your goals. Ask yourself, “How do I want my family to manage the farm without me?” Notice that you have control of your farm, which means you get to control where it goes. Who should manage it? Who should receive passive income, like rent? Who should earn the active farming income?

These answers form the core of your estate plan. Be thorough and personal. Push your attorney to understand your wishes and spell them out. If you become disabled, the written instructions in your estate plan provide the framework for managing what is still yours: transfer of control. When you die, your estate plan governs the ownership changes: transfer of capital.

What’s the difference?

So, is a succession plan really just an estate plan? No. After clarifying your goals through the lens of “if I become disabled, and when I die,” you thank God that it won’t likely happen that way! Then, you identify lifetime action steps, especially to transfer opportunity and control.

You might think there is no one who can replace you; they just aren’t ready yet. If so, then a succession planning priority is to train your successor. Give them opportunity to learn and earn the business. We chuckle about how little decision-making authority the next generation has in an operation while the eldest generation is living, but, sadly, it is too often true. You invite their input, and then disregard it even though it may involve excellent new technical information they learned in college. After letting your successor make some decisions, avoid “Monday morning quarterbacking” unless you want to drive them away.

As your successor proves their ability, you let them actually start to control some of the operation. You start trading roles with them, in a sense, working for them but without the decision-making pressure. Your life is secure: you get land rent as long as you are living. Your estate plan will transfer the land upon death.

One big mistake in this sort of planning is to start with tax objectives. If you do, politicians control you! Focus on the family and the practical operation, and along the way, seek counsel before you make big changes. You might be advised to form a limited liability company to facilitate a gradual (or quick) transfer of control, or to help minimize risks and taxes. But getting an LLC is not a goal: it might be a tool.

Most importantly, be intentional. You may be tempted to just “see what happens” and react, but let’s be honest: you won’t transfer control that way. Set specific benchmarks and timelines and hold yourself and your successor to them.

Curt Ferguson owns The Estate Planning Center in Salem. Learn more at thefarmersestateplanningattorneys.com.