SUCCESSION PLANNING IS NOT
A SPRINT
Prepare Your Family
For The Marathon
D
id you know that only three out of 10 As you work on your plan, ask yourself: If you are thinking about the future of your
family-owned • farm and are ready to start on your succession
businesses,
including
family farms, have a written, formal
succession plan in place? Another statistic
tells an equally sobering detail: 12 percent
•
– largely due to poor succession planning.
•
•
will your role be?
Does the next generation understand the
their spouses?
How will you treat the next generation
equally (if that’s important to you) if
ultimately your job to make sure everybody
some family members don’t want to be
is on the same page early on to allow for a
seamless transition.
•
a part of the family farm?
What’s your financial position? Are you
WHERE TO START on track to retire when you want? (Farm
Anybody who may be impacted by the most farmers, so in most cases, you
equity is the default retirement plan for
success and failure of the family farm should
won’t be able to just give it to the next
be informed and generally well-educated
about all the potential succession planning
options available. Additionally, they should
have input when it comes to the actual
direction you decide to take. Therefore,
once you make the decision to start the
process, put aside some time for your entire
family to come together and review personal
goals and objectives. You should also
review the farming industry in general and
consider whether your farm can support
your family financially.
and plan for the future.
takes to make a living on the farm? Do
can be particularly complex, which is why
the conversation as early as possible. It’s
How long do you want to stay involved
plan, give me a call to discuss your options
financial commitment and hard work it
Succession planning for family-owned farms
it’s even more important for families to start
involved with the farm going forward?
after the transition is made, and what
of family-owned businesses do not survive
past the second generation of ownership
Which family members want to be
•
generation.)
What are some of the legal and tax
implications of selling your farmland,
gifting the land, incorporating or setting
up limited liability companies for ease of
transfer and equitable distribution?
This will help you start thinking through
the process of transitioning the farm to
the next generation and identifying a set of
family goals that will help you develop and
implement a plan.
The dynamics that accompany a family-
owned farm are complex. Everyone has a
different level of knowledge, ability, passion,
dedication, leadership or business savvy
to make it happen. History and emotions
can also result in poor decision-making,
which can doom the farm (and even family
by: Ben
Froese,
CPA, Senior Manager
545 N. Market St.
Wooster, OH 44691
234.249.3454
[email protected]
relationships). With that, it’s smart to have
an outside business advisor objectively assist
in the family’s succession discussions and
planning for their farm.
Rise & Shine • Fall 2018
7