South Bend / Mishawaka, IN – Having grown up in the Michiana area and being involved with livestock most of my life, I am all too familiar with challenges that farm families face when it comes to passing their life’s work onto someone else, whether it be a family member or a business partner.
Not only is it imperative to select the right person to shepherd the farm, it is also necessary to manage relationships, set up the right business framework, and deal with the complex tax implications that inevitably arise from transitioning the farm from its present to its future.
First and foremost, it is essential to clearly outline the vision that the current generation and management have for the future of the operation. These goals can then be expressed to all family members in order for them to have their say. This is important for two reasons: 1) it gives each family member peace of mind that they were able to give their two cents on future of the farm, and 2) it irons out many of the wrinkles that may come up before pen goes to paper.
Second, now that we have a handle on what the expectations are of each stakeholder, we can examine the options that will best suit the vision that the family has for the farm. This will be an intensive process that involves a number of different factors. Such a process will allow us to clearly identify the best plan for your business and your family. For example, it could lead to the formation of an LLC, a corporation, or perhaps a partnership. This step also includes analyzing an existent estate plan or creating a new estate plan. Depending on the circumstances, this could encompass the creation of a will, a variety of different trusts, insurance options, as well as a thorough explanation of how the probate process works.
Lastly comes the finalization of the plan and implementation. At this stage it becomes absolutely crucial that everyone involved is on the same page. Transparency is the key to a successful succession plan. During the process of finalization it will be important to go over contingency options in the event that life fails to unfold as expected. As all farmers know, the unexpected can happen at any time. This is the point where preparation can go a long way in securing a future for your farm, no matter what comes. Implementation of the plan could happen all at once, or it can roll out over time, depending on the preferences of those involved. It is also prudent to revisit the plan once every year to deal with changes in circumstance or a change in vision for the farm.
In a world full of uncertainty, do not leave the future of your farm and your family to chance. Each family has different dynamics and circumstances that necessitates planning with more than a one-size-fits-all approach. It is too common of a sight nowadays to have farm families ripped apart from long legal disputes over land, buildings, equipment, and even livestock. It is never too early to start thinking about the future of your farm.
The content of this article is for information purposes only, and neither contains nor should be considered legal advice.
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