Deciding what will happen to your farm or ranch when you’re no longer around isn’t a popular topic many want to discuss, let alone think about. Even if you’re not ready to walk away from your business right now – or even 10 years from now – without a succession plan, your farm or ranch will likely struggle to survive. We get it, it’s often an emotionally-charged topic.
In many cases, farm or ranch inheritance and succession planning involves strategies to pass the operation to the next generation, but what if you don’t have someone to take over? Whether you don’t have a successor with the right experience or willingness to take over or you have no heirs, thinking about what you want to happen to your business now can help ensure your goals are achieved and your wishes are honored.
With the average age of U.S. farmers being 58 and 70% of U.S. farmland likely changing hands in the next 20 years, it’s important to create a succession plan early. Even if you don’t have a successor, you likely don’t want your farm or ranch to fall into the wrong hands or have to be sold off to cover disability or long-term care expenses. Learn how to start your farm or ranch inheritance and succession plan, even if you don’t yet have a successor.
Create a farm or ranch inheritance and succession planning team
Creating a team of professionals to help advise on and navigate the complexities of succession planning is among the most important steps. When you begin the planning process, you’ll soon realize that succession planning is not a simple process and is different for everyone. From an accountant and a lawyer to your insurance agent, each resource offers professional guidance to help ensure your plan is solid and free of gaps.
If you haven’t taken a good, hard look at what your personal and business goals are for when you’re ready to retire, now’s the time. You’ll want to ask yourself questions like:
- When do you want to retire?
- Will you want to sell your farm or ranch when you’re no longer able to run it? If yes, what’s your timeline for selling your farm or ranch?
- Do you have liquid assets if you to cover unexpected expenses during retirement?
- Do you want to leave money to a charitable organization?
If you don’t have a successor in mind, you may want to start thinking about whether there is someone you can start mentoring to help take over or if you’ll eventually want to implement a plan for selling on your terms.
If you’re thinking, “I’ll get to it one of these days.” You’re not alone. Succession planning isn’t an easy or fun process. It takes time and crucial conversations. You can never start planning too early. It’s also important to regularly review your plan and make adjustments as needed. Start planning your farm or ranch inheritance and succession now and be proactive about making changes as you experience life changes.
It happens often, records like receipts, tax payments and loan documents can quickly pile up and become disorganized. Maybe you’ve always been able to fish a document out of a stack of papers on your desk or your vague file names on your desktop have always worked for you. This system may not be clear if you’re not around to sort it all out. Maintaining good records can help ensure business succession will be less time-consuming and frustrating.
It’s your future. Let’s protect it.®
Your needs and goals are unique to you, which is why succession strategies are different from person to person and operation to operation. Even if you don’t have a successor identified, it’s a good idea to start planning for the future now. Your local Farm Bureau agent can help coordinate with your team to help ensure you’re prepared.
Interested in attending an in-person, succession planning workshop? Our Changing Hands workshop is all about helping you learn more about succession strategies and planning tools that can be customized to help meet your needs. Find an upcoming seminar near you!