As farm acreage becomes more costly pushed higher by institutional investors, managing an affordable transfer of farm assets complicates Succession Planning. For many farmers close to retirement age, decisions concerning farm transfer must try to accommodate disparate goals. For example, farm succession planning may involve accommodating career-minded heirs who want to preserve the family farm legacy but have no intention of abandoning their career to run the farm.
Some farm owners find it helpful to begin farm succession planning by first writing down their goals, taking into account their wants, needs and fears. As they go through this process, they sit down with family members, treating the discussion like a business planning session. Some invite an outside facilitator such as their banker or minister to mediate differences and help meetings run smoothly.
They then begin piecing together their aspirations. What do they want for the farm’s future and how long do they want to farm? Who do they want to continue their vision for farm, a son who lives in a different state with an established career, a farm neighbor or a new farmer?
Some farm community members have tried writing a Christmas letter from the future, freely imagining the type of life they would like for themselves and the farm after they retire as primary operators. They also ask other family members to write letter which they then compare without bias.
Next, they establish, write down and discuss the things they need to happen like having family close by, repaying loans or making sure that the next generation stewards the farm sustainably.
Last, they recognize their fears such as running out of money in retirement or seeing all their hard work disappear because the new farmer cannot make a go of it.
Ascertaining wants, needs and fears gives farm owners a clearer picture of the overall goals for the farmland and family.
Often, the farmer must negotiate contradictory and complementary concerns to accomplish his eventual goal. Goals can range from retiring with high personal economic gain to retaining family ownership at all costs to safeguarding stewardship and community well-being. What would be most beneficial for the community, support regional economics and maintain sustainable farm operations – having an extended family member or a new farmer take over the farm? Perhaps, renting the farmland to a neighbor through a trust would best meet the goals.
Putting farmland into family trusts removes farmland from the marketplace pushing up farmland cost. When trust-protected land prevails, rural America becomes a landscape where absentee landowners rent land to larger farmers who may not hold the farmland with the respect the farmer envisions.
Decide how to achieve your goals, honor your family’s hardworking legacy and benefit your community within the context of family, community and support networks. Please contact us. We are here to help.
