Smart people realize that, at the end of the day, the lifetime they have invested in their farm will have to be converted to income for their retirement, a cash or cash equivalent inheritance for their heirs, a resource for the next generation of farmers to build on for the future, or perhaps all three.
Successful farmers understand that the best outcomes are those that are considered in advance, the possibilities considered years ahead of time, and the plans put in place based on those decisions are executed sooner rather than later to take maximum advantage of the possibilities. Instinctively these successful business owners understand that sustained growth is critical in order to generate the profits required to meet the security needs of the retiring generation, provide a fair share of the farm’s value to the off farm heirs, and reward the successors for their risks and hard work
And they recognize how the power of compound interest allows them to harness growth by setting things in motion today that will not be required for years into the future. In our experience, the objective on virtually every farmer’s mind, everyone reading this article for sure, is creating a process that will allow the farm to continue intact, without assets being sold off or pledged unnecessarily.
The farms continuous operation can provide retirement for the senior generation. an inheritance for the non-farm heirs, and an affordable opportunity for the next generation of farmers. Perhaps that’s what you were looking for when you did the search that brought you here. Were you looking for the tools, techniques, and strategies required to achieve these objectives?
The benefits of a well considered farm succession process begins the day you get serious about designing the future you want for your farm and your family. And the process continues forever, just like your family’s involvement in the farm will extend far beyond the lifetimes of everyone living today.
Three key planning elements are uniquely intertwined to create the succession and planning process we call passing down the farm. Strategic planning, what you’re doing when you plan beyond the next twelve to eighteen months, is a key element of the farm succession and planning process. .
Farm strategic planning, consistently rolling your planning ahead of you as you go, is about management training and leadership development for your successors so they’ll be ready to assume full responsibility when the time is right. By identifying who’s going to farm in the next generation you can get started with the leadership and management training they’ll need to handle the challenges of doing business in the 21st century effectively.
Farm succession planning, the expression generally used to mean everything associated with the entire process, is when you pick the people who are committed to the farm’s future and begin empowering them to conserve what you’ve built and leverage your efforts to grow the operation bigger in the future. When you begin now to open up areas of responsibility, in the eyes of your successors not just yours, you’ll send the right messages about your intentions for the future.
Estate planning, the wills, trusts, buy-sell agreements, and all the contracts required to fulfill your succession and planning is critical, too critical to be put off until everything is just right. Farm estate planning establishes the ground rules, faces the tax consequences, and gives the force of law to the strategies that will result in your wishes being spelled out for all to see.
Farm estate planning decisions need to be made today based on what you know today, where everything is today, and based on the best advice available today. As time goes by and the other elements of your farm succession plan fall into place you simply have your advisors update your estate planning documents.
How many movies have you seen where the old tyrant dies without having changed his will for decades – leaving the heirs and those who though they were heirs to fight over the spoils, resulting in another mystery for Miss Marple, Lt.Columbo, or the detectives on Law & Order to solve.
Don’t let that be you!
If you want to be even more successful in the future than you are today, a b2b mastermind group will show you how stay focused on what’s important. Connect with your peers via your own Internet conference call. Combine a traditional conference call with a Power Point presentation, run Q&A, share handouts, and record it all for instant playback.