The family farm is a centuries’ old tradition. We often spend more time thinking about its history and present, and we don’t spend enough thought into the future. In this second post, we’re going to talk some specifics to help you develop a succession plan for the family farm.
Realize that a succession plan isn’t just about inheritance. As this piece from Beef Magazine reminds, nearly 70% of Americans need long term care at some point in their lives. Who will take care of the farm if you become hurt or ill? Do you have powers of attorney in place so that someone can negotiate the price of your crops? Person to fix the tractor or handle payroll in your absence? (And speaking of, if you don’t trust someone to act on a short period, that’s a hint they’re not the right ones to inherit the farm.
Many farmers have benefited by taking careful inventory of their farms, documenting their operations, and considering specific jobs heirs. “Before the younger generation returns to the farm, it’s important that younger and older generations think about which skills the younger generation is bringing to the operation, ” Corn and Soybean Digest wrote in late June. “Setting standards for success is important, and having high standards is not surely a problem. It is important to realize that individuals meet high standards in small steps.
The authors recommend bringing the younger generation into the decision making process. By creating “a general structure that can be used to make business decisions.” (Corn and Soybean even provides a handy checklist for consider which relative is best for which job.)
One thing not to do
Worry about dividing the farm equally. As Beef warns, “bequeathing equal farmland shares to on-farm and off-farm heirs can be a disaster.” If there’s a dispute, equal says can paralyze a business, with disagreements it’s unable to move in any direction. Give someone responsibility and authority.
In Cattle Network, University of Wisconsin researcher suggests that putting everything in writing is essential. “In today’s world, a handshake or verbal agreement sadly do not carry any weight. When it comes to land contracts, agreements for the farming kid/s to take over certain parts of the farming operation, or wills. It’s important everything is put down in writing.”
When you’re ready to protect your farm and its future, we’re ready to walk with you. Reach out to our experienced attorneys today.