There is a saying that farmers never “retire,” they just “tire.” Many farmers and ranchers work late into their lives, and retiring or handing on the operation they’ve built up over the years isn’t something they want to think about.
That is the reason that farm succession planning is so important. Putting off such planning allows uncertainty if something sudden occurs.
“More often than not, planning is deferred until some critical point,” says Allan Vyhnalek, Nebraska Extension educator and farm transition specialist. “If there’s a sudden death, then your back is against the wall, and you could make bad decisions because of stress. It’s important to make sure we think about this while everything is going well; instead of during a crisis.”
Tough talk yields results
Vyhnalek will be covering the topic of farm succession planning during daily sessions at 11 a.m. on the Hospitality Tent stage at Husker Harvest Days, Sept. 14-16, in Grand Island, Neb.
“I used to chide farmers and ranchers to think about planning for retirement,” Vyhnalek says. “I don’t think any farmer or rancher ever plans to retire, so I’m not going to talk about that anymore. However, I will tell you that unfortunately, you don’t get to avoid the pine box. Everybody goes there in the end. I want you to think about what’s going to happen to your assets when you’re gone. You can’t take them with you,” he notes. “I’ve never seen any equipment or money in a casket with the deceased.”
Through hundreds of workshops, webinars, and seminars over the years, Vyhnalek has listened to many farm family stories and heard many different circumstances of transitions. He knows that having those conversations with family members can be quite difficult.
Don’t put off a succession plan
At a farm transition workshop at HHD a few years ago, Vyhnalek noted that farming parents often make two big mistakes when it comes to succession planning. “The parents will decide to do nothing, and they assume that the kids will get along OK during the transition,” he said. “The second error commonly made is when parents make the assumption that their kids will want to keep the farm in the family.”
While 90% of farm transitions are successful, there are horror stories when families can’t get along during that transition period.
Vyhnalek noted an Iowa study of farmers that found 75% of respondents did not plan to retire or even semi-retire. Only 23% that were surveyed actually planned for full retirement.
But life throws a few curves, Vyhnalek said. “If you put off estate planning until a critical life event, like death or illness, you aren’t necessarily thinking the best at that time.” He suggested developing a plan in segments or phases over a period of time. “This helps you make better decisions along the way.”
You can learn more details about how to go about this difficult process by attending Vyhnalek’s sessions each day at 11 a.m. at HHD on the Hospitality Tent stage.