Whether you’ve spent a lifetime building your farm or ranch or you’re just starting out, it’s important to start planning for the future now. After all, you’ve worked hard, and successfully transitioning ownership to the next generation is one way to continue your legacy. But it’s definitely not an easy or one-size-fits-all process. A succession plan can ease the complexities — legal, financial, emotional, family dynamics — of transferring your farm or ranch.
Farming and ranching are more than just jobs — it’s your legacy. Something you’ve cherished for perhaps a lifetime, and something you want to continue among your family’s future generations. Nearly all U.S. farms are family operated.¹ According to AgWeek, 70 percent of U.S. farmland will likely transfer in the next two decades,² it’s important to prepare the next generation now.
A generation or two ago, passing on the family farm or ranch was a much simpler process because land values were lower, operation size was smaller and more family members remained involved in aspects of running the farm or ranch.
Here are three steps to help you get started in the succession planning process.
1. Start the conversation.
One of the hardest parts of succession planning is having the initial conversation with your family. Talking with your whole family early on can help you set goals and create a path for a smooth transition.
2. Identify a successor and set goals.
To develop an effective farm and ranch succession strategy, you’ll need to define goals. Identifying a successor and dividing assets can be a tough subject, so the more time you have to plan and set expectations for your family, the better off you — and they — will be.
3. Create a team.
Because of the complex nature of the succession planning process, it’s essential to have a team of resources who can advise you on best practices and help complete the right paperwork for a smooth transition. Your Farm Bureau agent and regional financial consultant can help manage your team of resources. You may want to consider adding an accountant, a lawyer, a financial planner and a lender to your team.
Plan for tomorrow, today.
It’s never too early to start planning your strategy. Connect with your local Farm Bureau agent to learn more. Together, you’ll map a strategy that fits your unique needs and goals.