Keys to Effective Succession Planning
What will happen to your farm when you retire? Many farmers will pass the reigns to their children, but the details of these transitions aren’t always clear. A succession plan is key to ensuring that your farming operation continues to be a success and that the next generation is prepared when the time comes.
In the second episode of “Management Matters: Focus on Profitability,” Kevin Spafford, founder of Legacy by Design LLC, explains the importance of succession planning and shares tips on how farmers can effectively draft a plan of their own.
- Take all parties into account when writing your plan. Multigenerational farm families have members who will continue to work on the farm, as well as inactive members who have an interest in the family legacy—give everyone a seat at the table.
- Too many people think succession is for “someday,” just before they pass or retire. Getting a head start on succession planning before you retire offers a living benefit to the farm and to your family.
- Most estate plans aren’t designed for succession. A succession plan mapping out the transition process is key to ensure that the operation runs successfully for the coming generations.
- Start now. If you’re in your later years, set up a transition plan that runs over a five- or seven-year period. If you’re in your early years and you’re planning 30 years out, look at the big picture and map out a direction for your operation.
- Get your plan in writing. That written plan should include:
- Ownership transition.
- Leadership development.
- Financial security.
- Legal information.
- Estate tax.
- Farming is both a lifestyle and a business. Help active and inactive members plan the transition by separating family issues from business matters and handling family assets separately from farm assets.
Learn more at Spafford’s “Five Keys to Effective Succession Planning” workshop.
- What: A comprehensive look at succession planning, including best practices, mistakes to avoid and pen-to-paper exercises to start drafting a plan.
- When: December 4
- Where: Moline, Ill.
- For more information and to register, visit http://soygrowers.com/succession-planning-workshop/
If you have questions on succession planning, visit www.legacy-by-design.com or email Kevin directly at email@example.com. Stay tuned for the next episode of “Management Matters” for additional insights into farm profitability.