What to do with the Family Farm
Now more than ever a well thought out plan for the farm family is critical to its sustainability, particularly in difficult economic times.
What You Know
Well, here you are. Looking to see what we might have to say about your farm, your family, your future.
Our first statement is to congratulate you for coming this far.
Farmers are very comfortable with the stages of farming: the planting, cultivating, and harvesting of crops; the lifecycle and maintenance of livestock, whether for dairy or produce. You can recite the weather forecast for the next week before most folks know what the weather is like outside today. You understand equipment purchases, lease options, budgeting for the lean years and lending a helping hand to a neighbor in need.
Comfortable you are until the topic of the future sneaks in to the conversation. Easy enough to postpone the discussion when we are 30 or even 40 years of age. Lots of time to think about it. Too much to do today. Before you know it, you are wondering what will happen to your farm, your life, your family, your children and uncertainty takes hold.
According to WealthCounsel, LLC, 70% of the farmland belonging to the current generation will change hands over the next 20 years. 88% of farmers are not on the track to pass on the family farm through a defined exit strategy nor do they know how to develop one. One thing is for certain: the current generation holding the reins on the family farm is getting older as noted by the statistics that those over 70, are the fastest growing group of population we have ever known.
Questions You May Have
• What will happen to me and my wife, after our children are gone and we find ourselves slowing down?
• Do any of my children want to assume responsibility for our farm? Are they ready?
• How can I help my children (child) be ready for the responsibility that comes with farm ownership?
• What if my children (child) do not want to continue the farm? What are my options?
• How do I gauge the potential impact of such risks as health issues, financial upsets, and longevity?
• Are there ways to plan that minimize the tax liability, protect my family from the uncertainty of life events, while maintaining control during my lifetime?
• Is it better to hold my farm and equipment or sell it now; what might be the impact of waiting?
• How do I balance being fair with my children and still maintain sufficient assets to support the farm?
• Does a farm transition plan mean that I lose control?
• What happens if farming partners split?
• Can I gift some of my assets over my lifetime?
Wilson Law Group
Wilson Law Group understands your dilemma. We understand that the preservation of your family farm has been your lifelong career. Now, perhaps the time has come….or is arriving soon enough, that you need not only a plan to plant the seeds for next year’s crop, but also the plan to plant the seeds for the next generation, either within or beyond your family.
We have dedicated a significant portion of our practice to learning and understanding the problems that face the farm family and the solutions available through estate and succession planning.
We understand you have nurtured and built a strong family tradition; one of honor, hard work and perseverance. A well thought out estate plan combines both the financial and emotional impact of transitioning your family farm during and after your lifetime.
What’s Next? Procrastination Be Gone!
• Set your financial and personal goals. It is difficult to arrive to a place not yet defined. As you become more educated in estate and succession planning, you may adapt your goals, but identifying what is important to you is an excellent place to start.
• Identify your concerns or issues. It is reasonable to have questions and every family has its own unique situations to consider.
• Communicate with your family. Whether it is the desire of your children to own some or all of the family farm business or note, assessing their interest, their aptitude for managing the business and the timing will all come into play when discussing the future of your farm. Your spouse’s input will be invaluable and may draw your attention to key points that you had not yet considered.
• Summarize your financial picture. This is an excellent opportunity to discuss your financial retirement path with your trusted financial advisor. At the very least, knowing where you are today, will be critical to making viable assumptions about tomorrow.
• Seek professional consultation. Whether you meet with a farm business focused professional at Wilson Law Group or seek assistance elsewhere, you will benefit from an estate planning attorney who understands your world and speaks your language. We can add to the conversation what you might not know you don’t know.
• Back to the future. Avoid procrastination. If you have read this far, take that positive next step to protecting you and your family for your lifetime and beyond.