Farm transition is a hot top for families in agriculture across the United States. Statistics show over 87 % of farms in the U.S. are family run operations and well over half of the farmers are over 55 years old. Planning for a smooth transition is an important topic, but one that isn’t easy to face.
The following tips will help get you started:
Determine what assets the farm holds. Assessing the financial picture is an important first step. Aside from the basic property and belongings, there is the matter of the estate tax. A large portion of your assets can be affected by this inheritance tax. Proper research is necessary to fully understand the legal and financial implications taxes have on the family farm.
Plan for transfer of responsibilities. Regardless of the size of your family farm, transferring responsibilities from the patriarch to the son or daughter can cause ripple effects throughout the operation. Management transition can change the way key employees and other family members work. Ideally, a transfer of power is done gradually. Current management trains and supervise while gradually increasing responsibilities until they are in an advisory role.
Consult with the experts. Set up meetings with professionals to map out a solid game plan. There are a lot of moving parts in both family farms and the current tax codes. A professional can help reduce the costs and develop a solid succession plan. Invite both generations to the meetings so everyone is on the same page.
If you need any help with your farm transition, contact us we are happy to help!