Is it important to you that your heirs continue farming?

That’s not merely a rhetorical question. Most farmers I work with sincerely desire that future generations continue to enjoy the farm life they love. A primary goal is to pass on to a successor not only a good livelihood, but more importantly, the stuff that city folks just wouldn’t understand: independence, hard work, elbow room, close-knit community, self-sufficiency, family and faith. Farmers want to be fair to all of their heirs, and they know this means treating the children who have been helping make the farm successful differently from those who moved on to other careers.

But from my observations, not every farmer considers it important that the farm carry on. Some, in word or deed, clearly say, “I don’t really care that much.” When I encounter this mindset, I am curious. The reasons behind it generally fit one of three categories:

• “It’s simply not a big deal.”
• “Why should I care?”
• “I don’t want to think about it.”

How and why?
The first category looks like this: The children have all moved on to different careers and are not at all tied financially or emotionally to the farm. They appreciate the help their parents have provided over the years. The parents, in these cases, may themselves see farming as not that different from other professions. They fully support their children’s choices. In the parents’ estate plan, the farm is merely the parents’ career and retirement fund, and possibly wealth to pass on to heirs someday.

The second category, “Why should I care?” comes from the parents who wish their children would take an interest, but for whatever reason, it isn’t working out that way. The children (who might even be employed on the farm) have an “entitled” mentality or aren’t showing management initiative, or are just plain lazy. They don’t comprehend that not all years are as profitable as $7 corn, and that you haven’t reaped the benefits of farm life until your character has been shaped by hard times. The parents wish the children appreciated what is available to them, but since they don’t, the parents aren’t inclined to hand it to them.

Then there is the third category — the one who just doesn’t want to think about it. When asked, they say, “I’ll get around to it before long,” or “you’ll find out when you need to.” They might explain, “I haven’t quite got the details worked out in my mind yet.”

In recent months, I’ve visited with a lot of young farmers about succession planning. They are typically hardworking, committed individuals who share their parents’ love of farm life. They stayed on the farm and have a deep appreciation for the wisdom and experience of their elders. In the most successful operations, the young farmers, often with more formal education, are earning the respect of the elders, as well.

These young farmers have embraced their parents’ vision of continuing the farming legacy. They aren’t aiming to take charge or to get everything. They want their siblings treated fairly. They have also heard statistics about how most family businesses fail by the third generation. They know they are vulnerable. They have staked their future on the continuing success of this operation. They are largely at the mercy of their parents, who still control the assets.

Committed to the dream
I get to interact with these young farmers because they are committed to carrying out their parents’ dreams. They want to know how modern laws create new opportunities and pose new challenges. They learn the importance of documenting business decisions in a timely way, ensuring that paperwork (leases, loans, employment contracts, etc.) matches their intentions, using empowering trusts for transfer of land, electing subchapter S taxation for operating limited liability companies, keeping equipment in the right name for the ultimate tax deductions, and protecting the young farmer’s opportunity, just to name a few. They also learn that rules often change, and how important it is to seek professional counsel on a regular basis.

Ultimately, these young farmers realize that successful succession can only happen if they commit with their parents to a methodical, ongoing process of planning and following through on the plan. Both generations must dedicate focused time and effort to bring about the desired results. Parents bring wisdom, experience and assets, while the successor brings education, energy and initiative.

Is it important to you that your heirs continue farming? The young farmer can’t do it alone.

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