Don’t Be an Ostrich about Succession Planning

 
Don’t Be an Ostrich about Succession Planning

Yes, succession planning is overwhelming. You have to think about dying, who will lead the farm in the future and who gets what.

“A lot of families want to just stick their heads in the sand and do nothing,” says, Polly Dobbs an attorney with Starr Austen and Miller in Logansport, Ind., and member of the Farm Journal Legacy Project Advisory Team.

“But, doing nothing is just not an option if you want the farm to have a successful transition to the next generation,” she says. “A ‘do-nothing plan’ is a disaster waiting to happen.”

The first step is go get over the intimidation factor. “Once you start having conversations, a lot of the weight will come off your shoulders,” Dobbs says.

Do not make assumptions about who may or may not want to be involved in the farm, Dobbs says. Instead, talk to all potential family members. As children grow up and start their own families, it is less likely those heart-to-heart conversations will happen naturally.

Consider having a family meeting to kick off these conversations.

Then you can get into the more technical aspects of succession planning, such as wills, trusts and transferring property.

"This process doesn’t have to be overwhelming," Dobbs says. To help frame the issue, Dobbs says farmers should ask themselves: What if I get hit by a bus?

"Draft your succession plan like that life-changing event is going to happen tomorrow," she says. "The hard work comes in establishing the foundation for your plan based on today’s circumstances—the tweaks are easy as things change down the road."

For example, Dobbs says, if your grandson is still playing with toy tractors in the backyard, don’t draft your plan to hinge on him taking over the farm operation. "When he’s ready 17 or so years from now, tweak your plan," she says.

Once you have a potential plan, be sure to share your intentions with your children, Dobbs advises. “Their feedback can be really valuable, so you know that what you put on paper has a good chance of succeeding when mom and dad are gone and the kids are stepping into ownership,” she says.   

 

Further reading…

Navigate the Legal Side of Succession Planning
By Polly Dobbs
Estate planning is important for all families and business owners, but it is crucial for farm families. A solid basic estate plan serves as the foundation for a farm succession plan. Estate planning isn’t for someone older or someone richer; it’s for you.

5 Legal Estate Planning Strategies
By Polly Dobbs
A comprehensive succession plan gives your farm the best chance of surviving for future generations. There isn’t a cookie-cutter approach to estate planning, so you must factor in your goals, family dynamics and financial situation. Here are some strategies to consider.

Your Succession Planning Portfolio
By Sara Schafer
Succession planning is more than a will. It involves a portfolio of vital documents, constant communication and a purposeful knowledge transfer. Compile these documents to be ready for the unexpected.

Take these 6 Steps to Leave Your Legacy
By Katie Humphreys
A love for the land and the bounty it produces starts with little tykes and, we hope, stretches from one generation to the next. Rising land prices, boom times in agriculture and the aging of farmers are awakening an awareness of the need to plan. Fortunately, the strong economy is enticing more young producers. Knowing where to start the transition is the holdup for many.

 

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