Some of you got it right, passing down the farm is farm succession from the current generation of owners to the next, the folks who are going to be owning and running the farm in the 21st. Century. However, we found out the hard way that we are the only one's using the expression passing down the farm when we are talking about the process and strategies of management and ownership transition of the farm and business to the successor generation.
Almost nine years ago we registered our domain name because we had been told that the older a domain name is, all other things being equal, the better it is for search engine rankings. And we knew we were going to create a farm succession and planning checklist someday - so we'd be ready, #1 on Google.
Today as we begin to populate our web site with new and updated content about farm succession and planning, we can look at our listing and see that sure enough we're right up toward the top of the search engine listings.
What we realized, after doing some extensive keyword investigation, is that being #1 is meaningless since almost no one ever types in the expression "passing down the farm" into Google or any of the other search engines. We made the obvious mistake of thinking that everyone else used the expression - when they don't. Too much time reading our own press releases I guess.
Passing down the farm is the benefit - the goal, the objective on virtually every farmer's mind. It is not, however, what they think of when the go online looking for the tools, techniques, and strategies required to achieve the results they seek however.
The benefits of the passing down the farm succession process begin the day you get serious about designing the future you want for your farm and your family. And the process continues forever, just like your family's involvement in the farm will extend far beyond the lifetimes of everyone living today.
Here three key planning elements uniquely intertwined with each other to create the succession and planning process we call passing down the farm.
Strategic planning is a key element of the farm succession and planning process. You may not use such a high toned expression but that's what you're doing when you plan beyond the next twelve months - consistently rolling your planning ahead of you as you go.
Farm strategic planning is also about management training and leadership development for your successors so they'll be ready to assume full responsibility when the time is right. There are some mistakes your farm can absorb and keep right on chugging along and there are some that will totally destroy what has been created.
Start today by identifying who's going to farm in the next generation and then get started with the leadership and management training they'll need to do so.
Succession planning is the process where you pick the people to run the place in the future and begin empowering them to conserve what you've built and leverage your efforts to grow the operation bigger in the future.
Growth is critical in order to generate the profits required to meet the security needs of the retiring generation, provide a fair share of the farm's value to the off farm heirs, and reward the successors for their risks and hard work.
When you start now to open up areas of responsibility, in the eyes of your successors not just yours, you'll send the right messages about your intentions for the future.
Estate planning, the wills, trusts, buy-sell agreements, and all the contracts required to fulfill your succession and planning requirements DO NOT come last.
Farm estate planning is critical, too critical to be put off, because it establishes the ground rules, faces the tax consequences, and gives the force of law to the strategies that will result in your wishes being spelled out for all to see.
Estate planning decisions need to be made today based on what you know today, where everything is today, and based on the best advice available today.
As time goes by and the other elements of your farm succession plan fall into place you simply have your advisors update your estate planning documents. How many movies have you seen where the old tyrant dies without having changed his will for decades - leaving the heirs and those who though they were heirs to fight over the spoils, resulting in another mystery for Lt.Columbo to solve. Don't let that be you!
Over the last thirty years people have said to me, "but Wayne, our farm is different" and it is. Often this comment was made in an effort to convince me that their situation was so unique it defied the experts and therefore their lack of planning was justified.
Passing down the farm then is the result. Your farm and family's unique situation addressed using well considered strategies that are being used successfully by others.
There are currently no comments on this post. Be the first one!