Farm Succession Planning » farm estate taxes

Tell The Truth, Are You Seriously Interested In Farm Succession Planning?

admin — Mon, 03 Jan 2011 19:13:00 +0000

Prudent individuals know that, at the end of the day, the lifetime they have invested in their farm must be changed into money for his or her retirement, a cash or possibly cash equivalent inheritance for his or her heirs, a source for the following generation of farmers to build on in the future, or maybe all three.

Successful farmers understand that the very best ultimate results are those which are discussed beforehand, the probabilities considered several years ahead of time, and the strategies applied driven by those decisions are executed sooner rather than later to take optimum advantage of the possibilities.

Intuitively these successful business owners know that sustained development is crucial in order to create the profits essential to satisfy the wants of the retiring generation, give a fair share of the farm’s value to the off farm heirs, and incentivise the successors with regard to their risks not to mention hard work

Plus they fully grasp the way the power of compound interest lets them harness growth by setting things in motion today that won’t be needed for decades into the future.

In our experience, the real objective on virtually every farmer’s mind, people reading this particular article for sure, is developing a method that will allow the farm to carry on intact, without land and other assets being auctioned off or pledged unnecessarily.

The farm’s uninterrupted operation can supply retirement for the senior generation. an inheritance for the non-farm heirs, and an affordable option for the following generation of farmers.

Perhaps that’s what you were looking for when you did the Google search that brought you here. Were you searching for the tools, devices, and strategies needed to achieve these objectives?

The advantages of a rightly thought out farm succession process starts the minute you get serious about creating the future you are looking for for your farm and your family.

And the process continues eternally, just like your family’s engagement in the farm will extend far beyond the lifetimes of everyone living today.

Three key planning elements are uniquely interwoven to create the succession and planning process we call passing down the farm.

Strategic planning, what you are doing when you plan further than the next twelve to eighteen months, is a really key element of your farm succession and planning process. .

Farm strategic planning, constantly rolling your planning in advance of you as you go, it’s about management training and leadership development for the successors so they will be prepared to assume full responsibility when the time is right.

By identifying who’s going to farm in the subsequent generation you can get started with the leadership and management training they’ll need to handle the challenges of doing business today effectively.

Farm succession planning, the expression frequently used to mean everything linked to the entire process, is when you pick the people who are committed to the farm’s future and start empowering them to conserve what you’ve built and leverage your efforts to grow the operation bigger in the future.

When you begin now to open up areas of responsibility, in the eyes of your successors not just yours, you’ll send the best 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 is critical, too critical to be put off until things are all just right.

Farm estate planning secures 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.

Farm 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 advisers 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 Inspector Guido Brunetti, Lt. Columbo, or the detectives on Law & Order to solve.

Don’t let that be you!

If you are serious about farm succession, or if you are a professional involved with farm succession planning – or maybe an farm association executive whose members want to see their farm continue into the next generation, follow the link below.

Because your situation and family dynamics are unique, no one size fits all approach will work for you. If I was going to provide real and lasting value I had to create a process that was infinitely customizable – for each situation. By providing you with the right questions – those that uncover what’s important, for you to ask your family members, your employees, and your advisors.
Click here to find out how this is possible!

Tax Issues When Leaving a Business to Your Child

admin — Fri, 27 Aug 2010 20:13:10 +0000

Businesses used to be transferred from one generation of a family to the next very regularly. While it no longer happens anywhere near as much these days, that doesn’t mean that you can’t leave the business you’ve worked so hard to build to your kids.

The passing of a business from one generation of family to another is known as succession planning. Most articles you read on the web refer to succession planning as the recruitment and placement of employees in a business to ensure its future. While Microsoft and Google might need subsequent managers, we are talking about family in our case.

Passing a business to your children might seem like a simple task. It is not. Not even close. There are a bundle of issues that have to be addressed. Perhaps one of the biggest is the tax impact such a transfer will have. Uncle Sam likes to collect as much as he has the nerve to from whomever he can get it. The taxes that apply to these situations are big ones.

The estate tax and gift tax have some of the highest rates you will find. Both will apply to your situation and can result in such a burden that the only way to pay them is to sell the business to raise cash. That, of course, is the worst case scenario, but one that unfortunately happens a lot.

Then there are the more practical issues that each family faces. Specifically, what if you have more than one child? If you are lucky, you can end up with a simple situation where only one child is interested in carrying on with the business. Most of us aren’t that lucky. Instead, more than one child is usually interested in running the business and both can have very different views of how it should be done. This puts you in an awkward situation as you can imagine.

How do you deal with all these issues? The answer is to start tackling them early on. There are strategies that can be employed to limit the tax damage from such a transfer. Time also allows for family dynamics to play out to the point where everyone can get past emotions and make logical decisions on the future.

If you hope to leave your business to the next generation of your family, acting now is the key. A financial planner or estate planning attorney should be able to help you with the process.

Barry Milton writes about succession planning and other financial planning subjects for UFCAmerica.com.

Article Source: http://EzineArticles.com/?expert=Barry_Milton

Passing Down The Farm to the Next Generation

admin — Thu, 10 Dec 2009 04:42:09 +0000

http://www.passingdownthefarm.com/farm-succession-system If passing down the farm is important to you, if you want to be in 100% control of the process, and if you believe that you are the one who will be held accountable for the results – as defined by the success of your farm’s transition, it’s time for you to take action!.

Duration : 0:3:44

Farmer Mastermind Groups in the 21st Century

admin — Thu, 10 Dec 2009 21:22:49 +0000

The mastermind principle, as originally conceived by Napoleon Hill, is about the power of a “third mind” made possible through regular collaboration.

That’s when a small group of co-equal colleagues and contemporaries share experiences and insights that create “Ah ha” moments for each of them.

In a farm mastermind group there are no profesional organizers. There are no gurus acting as experts.

And nobody is paying anybody for advice, group management, or facilitation.

In a farm mastermind group it’s just you with a few of your colleagues, other people you know, like, trust, and whose opinions you respect. Simply peers with no ax to grind and nothing to sell, with only your best interests at heart.

That’s right – no professional moderators and no organizers are required to have a successful sustainable group that meets regularly over the years. You will need a tried and true process, an evolving agenda, and simple management tools. More about that in a minute.

Many of the old fashioned mastermind groups are the face-to-face variety, like the one that Thomas Edison, Alexander Graham Bell, Henry Ford and Harvey Firestone made famous nearly a century ago.

Just think, if you could put together a group of peers, people from your industry, you could have all the benefits that come from sharing experiences with people who know what you want to know. People whose insights are directly relevant to you.

Today, cheap long distance calls, instant online webinar services, and free Yahoo! groups can make your meetings much more effective than the old fashioned face-to-face variety. No time and money wasted getting to and from the meetings and the ability to connect with the other members of your group 24/7 – to deal with the speed of business today.

You can get together in person of course – that’s what your trade association meetings are for.

A few years ago I suggested to several farm owners from across North America, members of the same association, that they create a mastermind over the phone to continue a discussion we had together at their annual meeting.

That was about 15 years ago and they still get together twice a month to share strategies, offer insights from their experiences, and provide support to one another.

During the intervening years a couple of the original members have retired and one has passed away – each to be replaced by their successor as the process moves inexorably forward.

It is the farm mastermind group that transforms farm succession planning into a never ending process of growth, where next generation leaders and managers learn with the help of the senior generation’s peers.

Farm mastermind groups form a powerful experience exchange resulting in continued expansion of insights and knowledge based on the experiences of the entire group.

Using the simple techniques that we later complied into a free video series that is part of Passing Down The Farm in the 21st. Century I established and participated in several peer to peer mastermind groups.

Farm Estate Taxes and the New Ford F150 Pickup

admin — Tue, 08 Dec 2009 20:03:08 +0000

Recently I ran into an old client sitting proudly in his new red pickup.

He was from the old days when I was pretty new at helping farmers redesign their businesses for the future.

I had not seen him for years.

He is a little older than me still hanging around the farm, although he has pretty much turned things over to his daughter and son-in-law,

His sixteen year old grandson sat proudly beside him, amazingly it was his grandson who was behind the wheel. I couldn’t believe it, I had to ask to see his license he looked so young.

I asked my old client if he was nuts or what letting the kid drive his brand new truck, it had less than 3,000 miles on it. He did look a little nervous sitting there in the passenger seat.

His response, “how else is he going to learn, his dad won’t take him out and his mother’s too busy, besides he asked if he could drive me to the coffee shop.”

What drives people crazy about teenagers is they will ask for what they want to do and we have to figure out why they shouldn’t do it.

Three things came to mind a week later when I was reading about estate taxes and the assertion by some that estate taxes are a huge threat to passing down the farm to their next generation.

Because the farm’s greatest asset is the land, notoriously illiquid and whose price often climbs during good times and bad – estate taxes suck the heart out of the business at the worst possible time.

I am sure there are statistics to “prove” that the ultimate failure of otherwise successful farms is because of these taxes.

It was interesting to consider. My old client’s father knew that all three boys wanted to farm and their John Deere Dealership might not have the potential to make room for everyone. The additional land was the ideal solution, if only they could buy it right.

The old client (actually it was his dad) I was speaking with was able to double the size of their holdings back in the 60′s by buying the farm of a neighbor whose family had to sell up to pay their taxes and other expenses when the old man died.

Apparently he had failed in the end, not because of the taxes, but because he failed to do anything to reduce them, divide them, delay them, or discount them during the time when he was alive.

The truth is that is was not the taxes fault. That was the law of the land and everyone knew it. They don’t keep it a secret and surprise your heirs at your funeral.

My old client had seen how things had worked out for their neighbor and pressed his dad to start planning for their future. By the time I met him his dad and mom had passed way and he was ready to start the process for his family.

The second thing that came to mind was a question. Why do successful farmers put off developing a succession strategy so the farm business can survive from one generation to the next? Why do they do something that leaves the farm family at risk and sets up an unprepared next generation for failure?

Why aren’t more farmers and ranchers rushing to get help developing a good succession and estate plan?

The kid behind the wheel gave me the answer to that.

He was not old enough to be afraid to talk about it. He was not afraid his grand dad would say no, and even if he did he would still have a chance to ask him again at the coffee shop in front of his friends.

As we get older we find it harder and harder to sit down with family members and express what we want the future to look like, for ourselves and the others.

If you are one of those people who will wait for the government to do whatever it’s going to do about taxes or anything else, your family will have the opportunity to sell your farm someday at an auction where your neighbors will be there to pick up the pieces of your estate for 10 cents on the dollar

On the other hand, if you are like that 16 year old kid and not afraid to talk about it, you just might be surprised with the outcome.

It’s possible that everyone else has been waiting for your to bring it up.

Don’t disappoint them.

If passing down the farm is important to you, if you want to be in 100% control of the process, and if you believe that you are the one who will be held accountable for the results – as defined by the success of your farm’s transition, it’s time for you to take action!.

If you are serious about farm succession, or if you are a professional involved in farm succession planning – or a farm association executive, you are in the right place!

Wayne Messick

Farm Succession Planning » farm estate taxes

Tell The Truth, Are You Seriously Interested In Farm Succession Planning?

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Tax Issues When Leaving a Business to Your Child

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Passing Down The Farm to the Next Generation

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Farm Estate Taxes and the New Ford F150 Pickup

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