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July 2013 Archive for Leave a Legacy

RSS By: Kevin Spafford, Legacy Project

Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project.  He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.

Think You've Got It Done? Evaluate Your Plan.

Jul 30, 2013

iStock Three Generations   low resolutionFrom Legacy Moment (04/04/2013).
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Recall from last week: If you think you've got it done, but want to be sure, the remaining questions will help you evaluate your plan. They will help you make sure your plan addresses your goals and creates the legacy you want to leave. This is the second of two parts; the first 10 questions were included in last week's Legacy Moment.  

For each of the topics in question, there are supporting resources at www.farmjournallegacyproject.com to help you. Rate the following statements for Disagree/Neutral/Agree: 

Rate the following statements for Disagree/Neutral/Agree: 

11. All of our tenant/landlord relationships are supported by written lease agreements and when possible, buy/sell agreements.  

12. We are confident the federal- and/or state-imposed estate tax will not unduly burden or obligate our heirs or force a sale.  

13. We are making off-farm investments to ensure financial security and maintain financial security for the senior generation.  

14. Each management team member is engaged in a program for professional development to improve skills and enhance capabilities.  

15. Our entire plan has been reviewed and validated by professionals in accounting, legal, financial, consulting, etc.  

16. The family and the management team weigh decisions based first on the goals of succession and then the tax, legal, financial demands of the business. 

17. My family, professional advisers, alliance partners, landlords and loyal employees know and understand our plans for succession.  

18. Our plan ensures long-term financial security and provides a means for surviving family and special needs, in case of death or disability.  

19. Employment in the operation is based on job openings and written family employments. Each job is supported by a job description and fair market wage.  

20. The operation pays rent/lease payments to a landlord or landholding entity.

News & Resources for You: 

Gauge your progress by checking off each action step as you move through the planning process Succession Planning Action Guide. 

With so many components involved, it makes sense to periodically review your buy-sell agreement Buy/Sell Review. 

Find understanding, advice and support from people like you. Join eLegacyConnect, a new community of farm families working through succession planning. 

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Think You've Got It Done?

Jul 23, 2013

 iStock A Barn with a View CompressedFrom Legacy Moment (07.19.2013).
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Satisfaction: The feeling you get when overcoming a challenge, completing a difficult task, or learning a new skill. Succession planning has been likened to all of these and more. It is challenging, difficult and for most, new. But if you've done it, made the decisions, put ink to paper, and shared your results, you can check it off your to-do list—right?

Not necessarily. Not all plans are created equal. Not all plans address your goals and ensure financial security, a smooth ownership transition, adequate leadership development, or mitigation of the estate tax.

If you think you've got it done but want to be sure, the following set of questions will help you evaluate your plan. They will help you make sure your plan addresses your goals and creates the legacy you want to leave. This is the first of two parts; the next 10 questions will be included in the July 26th Legacy Moment.

For each of the topics in question, there are supporting resources at www.farmjournallegacyproject.com to help you. Rate the following statements for Disagree/Neutral/Agree:

1. Our farm will remain in the family for the benefit and enjoyment of future generations.

2. The ownership transition will be gradual for the benefit of all concerned—owners, families, employees and customers.

3. Our farm will continue to provide financial security and career opportunities.

4. The farm is protected from the devastations of divorce, death, disability and dissolution.

5. The senior generation can opt to retire without unnecessarily burdening the income distributions and capital reserves of the operation.

6. The farming operation is supported with operating agreements, job descriptions, employee manuals and a family employment policy.

7. We know and have communicated the who, what, when, where, and how of all the family's succession planning arrangements.

8. We've adopted a business plan, organization chart and communication policy that will help the management team efficiently run the operation.

9. Our succession plan is based on clearly defined goals that address keeping the operation together, financial security for involved family and preparation of next-generation leaders.

10. We use a family council and/or board of directors to effectively separate family matters from business issues.

 

News & Resources for You: 

Did you miss out on this week's Legacy Project Workshops?  Don't worry - more opportunities are coming up in December!  Watch for details about events in Nebraska, Illinois, and Indiana.

Are you ready for succession? Take our quick self-assessment.

More than information, tools, and resources, eLegacyConnect is caring families, great advisers, and the best organizations in agriculture providing succession solutions for your farm family. 

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Three Ways Good Farms Go Bad

Jul 19, 2013

iStock For Sale Farm   compressFrom Legacy Moment (07.12.2013).
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1. Not sharing your succession intentions with other family members and loyal employees. The future depends on you. It rests in the decisions you make and the actions you take. Whether it comes up in conversation or not, people want to know about your plans for the farm's future. They want to know what you've done—how you've ensured continuation of the operation, when you'll begin grooming the next generation for leadership and if you've considered each family's needs related to financial security.

2. Not committing your succession plan to print. If it's not written, it doesn't exist. Writing makes it real. It forces you to make decisions, draw lines and commit to specific actions. Without a written plan, anything goes. Every person has a dream, but converting that dream to written goals and then supporting those goals with action will make your dreams a reality. Whether you write it or someone else does, it becomes yours the moment you say, "I will."

3. Not handling the tough matters and making the emotional decisions. Assuming they'll work it out after you're gone leaves a trail of discontent and destruction. No matter how good the operation is today, it won't last if you don't establish a plan for the operation to continue. Make good decisions for the business. Take definitive action and ensure the continuing success of your operation. A complete plan will include provisions for an ownership transition, financial security, leadership development and the estate tax provisions.

Everywhere I turn today, there are articles, seminars and advisors eager to help you create a succession plan. The support you find covers a range from excellent advice to unsavory sales tactics. Regardless of the quality of the service, it's available in plentiful quantities. Over the past several years, we've brought you all the information you need, as well as case studies to prove our methods and tools to start you on the right path.

The other day, I came across a KansasCity.com article titled, "Tax, estate planning crucial for keeping, passing on farmland." It covers the essence of a message we continue to reinforce at every turn. Dave Goeller, deputy director of the North Central Risk Management Education Center at the University of Nebraska-Lincoln, reinforces my sentiments, saying, "...good estate planning for farmers and ranchers is more than tax management. Good plans need to resolve legal issues, financial ones and the emotional ones of the participants, too."

Continue to send your questions. If you have and I haven't responded yet, it's coming—please be patient. My goal is to help you succeed, so don't hesitate to "Ask Kevin."

 

News & Resources for You:

 

Read "Tax, estate planning crucial for keeping, passing on farmland" by Gene Meyer.

"When is the right time to start planning?" "How do we get started?" These and more questions are addressed in the Legacy Project FAQs. your buy/sell agreement.

The next Legacy Project Workshops are right around the corner! Are you and your family registered yet, for Wichita, Kan.; Columbia, Mo.; or Evansville, Ind.?

 

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Five Things to Ask Before You Hire a Planner

Jul 09, 2013

Prairie   Woodland   Iowa   NRCSFrom Legacy Moment (07/05/2013).
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So, you've finally decided to hire a planner and put together a succession plan. Your commitment is the most important consideration in the entire process. It is the difference between failure and a successful outcome, the full realization of your legacy dreams. For something this important, you must be confident in the people around you; both your family and the professional support team you select will affect the outcome.  

You owe it to yourself, your family and the families dependent on the success of your farming operation to make good choices and select wisely. I encourage you to interview a potential pool of candidates to facilitate your planning process and then actively vet any professional advisers who might be added to the team. Recalling lessons from school, learn the what, who, when, how and why to help you make good decisions. Use the following questions before you hire a planner:

1. "What is your succession planning process? What is the family's involvement? What outcome might be expected by engaging in the process?"

2. "Representing which professions, who do you recommend become part of the planning team? From the family, who should be involved in the planning process and to what extent?"

3. "When will each stage in the process be completed? When will we begin to see the results from planning for succession in our business management and family interactions?"

4. "How long will each step in the process take? How should we interact with you to ensure efficiencies? How will each family member be involved?"

5. "Why?" The question why might be used to clarify any of the responses. "Why" should be used judiciously, however. It is both a powerful and demanding word. "Why" forces the interviewee to defend a position or delve deeper into a topic that might provoke a defensive posture and negatively affect conversation.

Ultimately, it's your succession plan. I encourage you to make informed decisions for yourself, your family and the farming operation. If you have any questions, please contact me at "Ask Kevin."

News & Resources for You:

Your succession planning project leader should possess abilities specific to the process.

Prepare for your planner selection interview with our Selecting an Adviser tool.

2013 Legacy Project Workshops are designed to give farming families good information, the appropriate tools and time to start the succession planning process. The format offers immediate feedback and concludes with suggested actions and opportunities for follow-up.

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Which Workshop Should I Attend?

Jul 02, 2013

LegacyWorkshopAmesFrom Legacy Moment (06/28/2013).
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You're not alone if you're wondering, "Where do I start and who can help?"

Each week, Legacy Moment is sent as a planning tip and encouragement to help farm families get a solid start on the road to multigenerational success. From readers like you, I receive a number of related questions or comments. From time to time, I receive updates from reader families engaged in the process; their reports are usually shared to inspire our efforts and to ask us to continue offering this outreach.

This morning, I opened my e-mail to find yet another invitation to attend a workshop about planning for succession. This one is presented by a university Extension and sponsored by a local ag lender. It is billed as a gathering of experts and promises a full day of learning. However, the agenda is clearly focused on estate planning and a number of techniques designed to eliminate the estate tax in passing assets from one generation to the next.

Though forthright in their intent to inform farm families about options, the typical estate planning lecture falls short of a discussion about how, when, why and who of actually planning for succession. It glosses over the obstacles in keeping the farm together and the family talking. It implies that legal documents and an insurance policy will solve the typical issues of succession. It's not that life insurance and legal documents aren't important—it's just that too many professionals fall back on an easy fix rather than address the difficult topics.

Succession solutions help you achieve your goals. For most, those goals are founded in maintaining the farm as a going concern, providing financial security for families actively working in the operation and preparing the next generation to lead. A comprehensive solution is multifaceted and intended to work for the owner, the family and the farm.

The Farm Journal Legacy Project, sponsored by DuPont Pioneer, includes a series of workshops designed to get you started. A single workshop cannot provide a succession plan, but it is a good first step on the path to success. If you've attended a workshop in the past, Farm Journal has scheduled a couple of "201" workshops to provide a next level of education, new tools and planning best practices. The 201 workshops will be held in December, so mark your calendars now and plan to attend on Dec. 9 in Lincoln, Neb., or on Dec. 13 in Indianapolis, Ind.

 To register now for one of our July workshops:

By phone, call Farm Journal Events at (877) 482-7203.

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