Make Farm Legacy Planning Your New Year's Resolution

Where is your farm headed for the next generation?

Every farm family is different. The one thing that tends to be the same among many of them is that legacy planning gets pushed to the back burner. Very few families have a complete estate and transition plan. Many have only a few pieces completed, like wills, trusts, or life insurance policies. How confident are you that your current plans will serve you well?

It's a great thing to think about (and actually do something about) when you're making those New Year's resolutions. If you don't do anything, do you realize that your legacy plan is largely in the hands of the government to manage for you? Scary, isn't it?

Potential family conflicts, sometimes rooted all the way back to childhood, make communication tough. Family members might be reluctant to share their true feelings or intentions, shying away from the tough conversation. These potential conflicts are the number one reason that farmers put off planning. 

In some farm families kids leave the farm after high school, whether it's going off to college and returning during breaks, or moving out of the area entirely to pursue another career. The extent of their farming future is reduced to dropping in on the weekends during harvest to ride along in the combine or help prepare lunch for the guys out in the field.

In other farm families children may have a passion for the farm. They love the production side of growing a crop or working with the livestock. They can't wait to get their own land or cattle and start making their own decisions on growing the operation.

Many families are a blend of the above. With so much diversity – where does a family start planning for the future of the farm operation?

It all starts with communication --- and family communication is the most difficult. Parents think they know what their kids want, and kids think they know what Mom and Dad should do in the future – but what if those impressions aren't correct? Before we can start planning a future for the operation, all sides have to start the communication process. These questions are relevant whether the children are 3 or 33 or 53!

  • Do the parents want their children involved in their farm operation?
  • Are the parents relying on farm land cash rent or land sales for retirement?
  • Does a child want to farm? 
  • Does the child have a passion for one side or all sides of a diverse operation?
  • Do off-farm children have a dream or vision of returning?
  • Do off-farm children want to be a part of the farm after the parents have retired from farming?
  • After retirement, will parents stay involved in farming as hired help or decision advisors?  
  • How long will the parents be involved after retirement?  Do they expect to be compensated?

These are not often easy questions – no matter which side of the generation you sit on.  These are conversation starters that have to be answered in an honest manner before any planning can begin.

 

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish