Owning and managing a farm can be a great way to earn a living and is also a legacy that many families would like to keep within the family for generations. If you own and operate a farm that you would like to pass down to the next generation, having a succession plan in place is very important as it will provide you with a range of benefits.
Identifies Responsibility
One reason why you should have a succession plan in place for your farm is that it will help to identify responsibility. After you would like to retire from working on the farm a succession plan will clearly identify who will be taking over ownership of the farm and which heirs will perform which tasks. This will help to provide clear guidance and ensure a smooth transition once ownership is ready to change hands.
Avoid Third-Party Bids
If you have a clear succession plan in place, it will also help to reduce the risk of a third party trying to buy your farm. Since a farm is such a big and valuable asset, there will always be competitors that will be looking to take over your farm to increase their market share. The succession plan will be binding and will prevent this from occurring.
Tax Planning
Another reason to have a succession plan in place for your farm is that it will help with tax planning. A farm is a very valuable asset that could trigger certain estate taxes. If you go through the process of having a full succession plan in place, the plan will also help you to develop a tax and estate planning strategy that will reduce these taxes as much as possible.
If you own a farm, you should contact us today to learn more about how succession planning can help to keep your farm in the family.
