Every farm family needs a plan. By creating a solid succession plan, the needs of the family and the intentions for the farms future are covered. Crafting a plan can ensure the financial stability and agricultural legacy of multiple generations. Without a plan misunderstandings and huge business losses are almost inevitable. Not only do tax laws change, but assumptions and arguments can stall any future transition.
Taking the time to create a solid and sustainable plan requires coordinating many moving parts. Here are a few key points to keep in mind.
First, make sure to include all the interested parties in your planning efforts. Define who these people are early in the process. Does it include only blood relatives, in-laws, cousins? Sharing information and gathering input can prevent future problems. A bonus to including the family in your discussions is that it creates a stronger sense of ownership. This can boost responsibility and productivity around the farm.
Second, recognize and address disputes. Sweeping issues under the table does not help your effort to develop a workable plan. Determine the goals and intentions of your fellow family members. What are their expectations? Are they even interested in taking ownership of the family farm? Are future retirement and health needs accounted for in your plan?
Third, actively involve professionals to be sure to your plan is fully viable. Your attorney, accountant, banker, or other advisors can keep the meetings on track and neutralize conflict within the family. Having a third party asking tough questions can take the sting out of some of the hard topics that need to be addressed.
Finally, know that drafting a plan will take time and require revisiting multiple times as the business and your family grows. Changes will occur in both due to marriages, children, business growth and decline, so keeping your plan current is a challenge.
If you need further assistance with your planning process, contact us. We are ready to help!
