Succession Planning is one of the most common things that I am asked to give advice about.
Succession planning for farmers simply means indentifying and developing a system for installing successors for key positions in a farm or property enterprise.
Many of my clients are farmers who work the land as part of a family. Unlike other businesses, the farm is usually expected to stay within the family and that can lead to some complications.
The first piece of advice I always give in regards to succession planning – and this holds true for all financial planning - is the earlier you start, the better. The earlier you start thinking about how you want the next 5, 10, 20 years to look, the smoother the transition and the more likely you are to achieve your vision.”
When a farmer contacts me the first thing I do is to make a time to come out to visit.
I was a farmer myself for many years so I understand what a tough job farming is. I understand how hard it can be to get away, so we spend a lot of our time on the road visiting our clients.
Every farmer and family is different and we take the time to sit down with the farmer (and if possible, the entire family) and have an honest and frank discussion about what everyone would like to happen in the future.
It is common in a family with, say three children for one child to want to take over the farm and for the others to be follow different careers. A simple way of making sure this is equitable is for the child who chooses to stay on the farm to start early, putting away money so that when the time comes, they have the equity to buy out the other two siblings and take over the farm in their own right.
What everyone wants to avoid is a situation where the parents are suddenly forced off the farm due to injury or another unexpected event. Without a plan a situation like that could cause tension amongst the family.
We want to achieve a smooth transition and one in which all those affected have a say in how the transition can occur.
Once a well thought out plan is put in face, everyone is free to move on and focus on making the farm profitable and successful.