Great question, as many Baby Boomers with farming and ranching operations are looking to retire ... soon.
So, how do you make a successful hand-off?
A recent article in the High Plains/Midwest Ag Journal took up this topic in Planning for the future of your farm operation."
The article contains some helpful tips, but one of the most important is this: a business plan is essential.
Consider the business plan a road map, providing direction, helping guide your decisions, and assisting well into the future.
Along the way, make sure that you have the terminology correct.
"Estate planning" deals with the disposition of your assets during your lifetime or after your death.
On the other hand, "succession planning" deals with the transition of your Ag operation to the next generation or others to ensure the continuation of the business.
When it comes to estate planning, if you do not make a plan for the disposal of your assets, then laws of your state will decide for you.
And that might not be the "succession" you want.
Consequently, you need to both create an estate plan and a succession plan for your Ag operation. That way you are the one who makes those critical decisions about the distribution of your assets and the continuation of your business.
Here are some ideas from the original article to help you create an effective estate and succession plan that is tailored to your operation.
Get ready to share.
Your estate planning attorney will need to know all of the details of your operation, your investments, and your retirement planning. Be open so that your estate planning attorney can create the best plan to benefit you, your family, and your assets.
Get ready to open up and talk.
Communication is a critical part of the process—one that is often downplayed or overlooked.
Get ready to involve the people who are a part of your operation.
Make sure to include everyone who is involved in the operation of the Ag business. This includes your spouse, your siblings, and/or heirs. They need to be consulted regarding whether they want to continue the business, their interest in particular family items, and any other wishes or concerns.
Above all, find an experienced estate planning and Agribusiness succession planning attorney. Not all attorneys are well-versed in these matters.
Likely your local extension agent may have a good referral or two for you based on his or her past experiences.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter and weekly blog digest while you are there.
Reference: High Plains/Midwest Ag Journal (February 29, 2016) "Planning for the future of your farm operation"