Farm Succession Planning » Succession Planning

Your Farm’s Long Term Success Will Absolutely Be The Results of Those Decisions You Make Currently!

admin — Thu, 17 Feb 2011 16:03:00 +0000

The key for your farm’s long-term success is ability (no not the ability but the motivation) to do what is actually necessary for you to pass your farm operation from your today’s senior generation to the next. And while the successor is normally an individual you are related to, it needn’t be. It might be a highly valued employee or possibly even somebody not known to you at present.

In any case the farm operation must continue to operate without having to be lessened as a result of various sorts of unseen and generally expense. A great many tactics are available to lower, divide, and delay the largely transfer costs only one truly weak business person wouldn’t take full advantage of them.

Mainly because failing to adequately give consideration to what you want the long term future of the farm operation to look like, after which you hold the essential strategic interactions with your family, is likely to maintain the deadlock that’s kept you from taking the actions that should be taken.

The end result, too little preparation and documentation creating not just a decrease in momentum but a loss of capital possibly even the farm as well.

It goes without saying passing down the farm is vital to you or you wouldn’t be perusing this article right now. Once you realize that it’s actually a matter of talking it out with your family – will you do something about it, or not?

Frequently people are reluctant to get going, even having that very first family discussion simply because they think that management succession plus ownership transition are the same in terms of farm succession planning. They may be scared they’ll lose control or something should they begin taking action now.

In fact it is the other way round.

It will take decades to prepare your successors prior to the senior generation operator seems contented handing over the full day-to-day business of the farm. As time goes by however, after they get more confident of their successors abilities their fear of letting go of control will be reduced.

For example the day-to-day management of the farm can start being shifted to the successor generation years ahead of the farm’s possession transition even commences. This can and maybe should be done progressively over time as the successor generation grows into a place of greater and greater confidence.

Even though only some of the children will run the farm operation in the next generation, the farm’s ownership may be left to them all.

Once it is really known who will be the next generation on the farm there are a variety approaches, more uncomplicated than you might imagine, to provide for everybody else fairly. First the family makes the selections then their advisors will show you how you can accomplish it.

And while this might not be normal, it might be entirely possible that the management, perhaps the eventual ownership of the farm is left in the hands of key employees as opposed to family members.

Suppose the kids are not thinking about staying or coming back to own the place after their folks retire. Perhaps a young farmer in the vicinity who’d love to farm is given the opportunity to take over.

The retiring generation can become advisors with the heirs providing insights and supervision.

There are several techniques, commonly used by their Main St. counterparts, to reassure that key employees who may become the owners is the future stay on the farm during the transition period.

Such tools as employment documents, non qualified deferred compensation agreements, stock option plans and change of management control agreements will be explained by your advisers once they fully understand your objectives for the future of the farm and the family.

Over time through careful planning, the heirs will receive their inheritance plus the young farmer will have the possibility of a lifetime, to own a farm – and actually be able to afford it.

I really hope I’ve provided some food for thought and motivation for action. The future will be the results of the decisions you’re making today.

Our farm succession planning toolkit provides an array of ideas and possibilities to help you to create the best future possible for the farm and the family.

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!

What’s the Connection Between Farm Succession Planning And The Farm’s Legal Organization?

admin — Wed, 16 Feb 2011 22:17:00 +0000

Years ago a famous estate planning attorney at law informed me that, from his many years of experience, farms and companies are structured because, in his words, that’s the way they were originally arranged.

I was young and inexperienced and didn’t fully grasp what he meant when announced one of the greatest stumbling blocks for success when it comes to farm succession planning has a lot to do with the manner in which the farm was originally organized quite a few years before, and not restructured.

He explained that farms, when they were begun, were commonly set up as sole proprietorship’s, partnerships, or corporations in accordance with the advice of their initial accountant, attorney, banker, or prosperous friend. That was what these trusted people recommended determined by what ever they recognized regarding the situation then. And yes it had worked out.

Go forward twenty years.

It’s quite likely that the same legal framework is in position. Unless there was some instant benefit or threat to the farm they were usually still set up how they were originally structured.

Now that 20 years have elapsed, it’s very probable that the next generation has became a member of the farm and really wants to be associated with its expansion. If they plus their spouses will likely commit to the long run of the business they would like to ensure that their efforts will be rewarded, now or in the foreseeable future – or both.

But nobody knows how. After all, the farm continues to be organized the way it was originally set up. Nobody has spent any time thinking about the other approaches for transferring the growth to another generation through brilliant planning strategies.

They take note of rumors of how others around have experienced substantial struggles for power and are totally dysfunctional both as a farm and as a family group. They don’t want this to be their legacy so they try to keep the subject from being discussed with the announcement, “someday this will all be yours” and then change the discussion.

Plus they are aware of other farms just like their own at which everyone seems happy and at peace with their blueprints for the future – everyone seems to be part of the conclusions with whatever has been determined and they’re growing.

Could be they ought to get the name of their law firm, but no – that will mean they might need to divulge to concerns and explain to some stranger their own personal info. Neither of those options are attractive for them. It’s no ones business and in any case, “our farm is unique.”

So they do what the majority of us try to do if faced with anything too unpleasant to address, they take the wait and see approach. Possibly this will simply go away somehow.

In fact, when they were in their twenties (or thirties or forties) their mother’s perspective on the affair had been “Someday it’ll all be yours!” and it had worked out – as viewed with excellent 2020 hind sight.

They had not been willing to rock their boat and their wife or husband had been willing (or so it seemed) to go along with the wishes from above. They’d waited and now they were the owners of the farm business and so the wait and see methodology might not be a bad one.

What they so conveniently forgot is how depressed, threatened, and humbled they had felt every time they had to face their spouse after yet another ‘discussion’ with dad.

And they can’t ever know, although they speculate about it on occasion, how much more successful financially everyone would have been if enlightened planning had been in place all those years between the day of that first talk with dad and when you assumed ownership.

How much more money would have been in your farm’s bank account or in the farm itself – rather than in the hands of the government because of the avoidable taxes you’d all been forced to pay because of the inefficient transfer process.

In 2007 I reviewed the case notes of farm family clients who were by far the most successful at making their transition from one generation to the next during the last 20 years, and there is a common thread.

What over 100 farmers who have successfully transitioned their farms from one generation to another have accomplished. And also exactly why it has worked for all of them over all that time.

Predicated on that I created “The 7 Keys To Successful Farm Succession” which clearly addresses, amongst other things, the need to reorganize the farm business as an aide to the succession planning process.

Today the options for planning are as good as they ever were and now you can have the information you can use to get the conversation started with your family and your advisers.

The Farm’s Long Term Success Will Undoubtedly Be The Outcome of The Actions You Are Making Today!

admin — Thu, 03 Feb 2011 16:35:00 +0000

The secret to your farm’s longterm prosperity stands out as the ability (no not really the ability rather the motivation) to undertake what is important for you to pass the farm from your today’s older generation to another. And while the next generation is normally an individual you are related to, it needn’t be. It can be a highly valued employee or maybe even someone unknown to you presently.

In any case the farm must continue to operate without having to be diminished by an assortment of unseen and usually preventable expenditures. A wide variety of practices exist to lower, divide, and also delay the typically avoidable transfer fees only one genuinely inferior business person would not take full advantage of them.

Because failure to contemplate what you would like the long term future of the farm to be like, after which you enjoy the essential strategic talks with your family, will probably continue the inertia that’s kept you from taking the very steps that need to be taken.

The end result, an absence of planning and documentation producing not only a decrease of momentum but a loss of money and in some cases the farm itself.

Obviously passing down the farm is vital to you personally or you would not be perusing this information as of the moment. If you notice that it’s really a matter of talking it out with your family – are you going to do something about it, or not?

Sometimes people hesitate to get going, actually having that very first family discussion simply because they believe that management succession and ownership transition are the same in terms of farm succession planning. They may be frightened they’ll lose control or something like that once they begin to take action now.

In fact it is the other way around.

Usually it takes a few years to prepare your successors before the senior generation operator seems comfortable handing over the entire day-to-day business of the farm. Soon enough however, when they get more confident in their successors skills their fear of giving up control will disappear.

For example the day-to-day management of the farm can start being shifted to the successor generation years before the farm’s ownership transition even starts. This could as well as perhaps should be done progressively over time as the successor generation grows into a role of greater and greater confidence.

Even though only some of the children will run the farm in the next generation, the farm’s ownership could be left to the entire group.

Once it is really determined just who will be the next generation around the farm there are several ideas, less complicated than you might imagine, to provide for everybody else fairly. First the family makes the decisions then their advisers will show you the best way to accomplish it.

Even though this might not be normal, it’s also possible that the managing, perhaps the eventual possession of the farm is left in the hands of key employees in lieu of family members.

Let’s pretend the kids aren’t attracted to remaining or moving back to own the farm after their folks retire. Perhaps a young would be farmer in the local community who’d love to farm is offered the chance to take over.

The retiring generation can act as guides with the heirs providing insights and supervision.

There are numerous techniques, very popularly used by their Main St. counterparts, in order to guarantee that key employees who may become the owners is the future stay on the farm during the transition period.

Such tools as employment contracts, non qualified deferred compensation agreements, stock option plans and change of management control agreements will be explained by your advisers once they fully understand your objectives for the future of the farm and the family.

Over time through meticulous planning, the heirs will receive their inheritance and also the young farmer will have the possibility of a lifetime, to own a farm – and actually be able to afford it.

I really hope I’ve provided some food for thought and motivation for action. The future will be the results of the decisions you are making today.

Our farm succession planning toolkit provides a lot of ideas and possibilities that will help you create the best future possible for the farm and the family.

What’s the Relationship, Farm Succession Planning And The Farm’s Legal Organization?

admin — Thu, 03 Feb 2011 00:05:00 +0000

Maybe thirty years ago a well known estate planning attorney told me that, from his many years of experience, farms and businesses are arranged simply because, in his words, that is the way they were originally arranged.

I was naive and inexperienced and didn’t understand what he meant when announced one of the greatest stumbling blocks for success with regards to farm succession planning has a lot to do with the manner in which the farm was originally organized many, many years before, and never modified.

He explained that farms, when they were originated, were typically established as sole proprietorship’s, partnerships, or corporations depending on the recommendation of their initial accountant, attorney, banker, or successful friend. That was what these trusted people recommended based on what ever they knew concerning the situation then. Plus it had worked out.

Fast forward twenty years.

It is quite likely that the same legal framework is in position. Unless there had been some instant benefit or threat to the farm they were usually still organized how they were initially structured.

Now that twenty years have passed, it is extremely probable that the next generation has signed up with the farm and needs to share in its progress. If they along with their spouses will likely commit to the longer term of the farm they would like to make sure that their efforts will be rewarded, now or in the foreseeable future – or both.

But nobody knows how. After all, the farm is still organized the way it was originally set up. No one has spent any time taking into consideration the alternatives for transferring the growth to another generation through ingenious planning strategies.

They take note of gossip of how others in the industry have experienced huge struggles for power and are totally dysfunctional both for a business and as a family group. They don’t want this to be their legacy so they try to keep the subject from being discussed with, “someday this will all be yours” and then change the topic.

And they also know of other farms just like their own in which everybody is so happy and at peace with their policies for the future – everyone is agreeable with whatever has been set and they’re thriving.

Possibly they should get the name of their law firm, but no – that will mean they would need to disclose to problems and explain to some new person their private information. Neither of these options work well for them. It’s nobody’s business and anyhow, “our farm is unique.”

So they do what most people try to do whenever confronted by anything too unpleasant to confront, they use the wait and see approach. Maybe this will blow over.

After all, when they were in their twenties (or thirties or forties) their dad’s point of view on the matter had been “Someday it’ll all be yours!” and that had happened as promised – as seen in excellent 2020 hindsight.

They had not been willing to rock their boat and their spouse had been willing (or so it seemed) to go along with the wishes from above. They’d waited and today they were the owners of the farm and so the wait and see tactic might not be a bad one.

What they so easily forgot is how desperate, unsure of themselves, and humiliated they had felt when they had to face their spouse after yet another ‘discussion’ with their dad.

And they can’t ever comprehend, although they wonder about it now and then, just how much more successful financially everyone would have been if smarter planning had been in place all those years between the day of that first talk with dad and when you actually assumed ownership.

How much more money would have been in your family’s banking account or in the farm itself – as opposed to in the hands of the government because of the unnecessary taxes you’d all been forced to pay because of the ineffective transfer process.

In 2007 I reviewed the file notes of farm family clients who were by far the most successful at making their transition from one generation to the next over the last twenty years, and there is a common thread.

What over 100 farmers who have productively transitioned their farms from one generation to another have realized. Plus precisely why it has worked for all of them over all that time.

Predicated on that I created “The 7 Keys To Successful Farm Succession“ which clearly addresses, amongst other things, the need to reorganize the farm business as an aide to the succession planning process.

Today the options for planning are as good as they ever were and now you can have the information you can use to get the conversation started with your family and your advisers.

The Future Will Be, No Doubt About It, The Outcome of The Choices You Make Right Now!

admin — Thu, 20 Jan 2011 14:49:00 +0000

The cornerstone for your farm’s continued success is most likely the ability (no not really the ability rather the willingness) to perform what is actually mandatory for you to pass the farm from your existing senior generation to the next. And while the next generation is normally someone you are related to, it doesn’t have to be. It could be a highly valued employee or even someone unfamiliar to you at present.

No matter what the farm operation has to continue to operate without having to be reduced as a result of an assortment of unseen and routinely expenses. Many techniques and strategies can be found to lower, divide, and postpone the primarily needless transfer fees only a genuinely poor business person wouldn’t take advantage of them.

Simply because failure to properly take into consideration what you want the long term future for the farm operation to be like, and after that have the essential strategic talks with your family, will in all probability maintain the stumbling blocks that’s kept you away from taking the actual steps that ought to be taken.

The result, too little preparation and documentation creating not just a loss in momentum but a loss of money and in many cases the farm itself.

Evidently passing down the farm is crucial to you personally or you would not be looking over this article right now. If you notice that it’s really a matter of talking it out with your family – are you going to do something about it, or not?

Very often people wait to get going, actually having that 1st family conversation since they believe that management succession as well as ownership transition are identical with regards to farm succession planning. They are really fearful they’ll lose control or something if they begin to take action now.

In fact it is the other way round.

Normally it takes a long time to prepare your successors prior to the senior generation operator feels comfortable handing over the entire day-to-day business of the farm. Over time however, after they get more confident in their successors ability their concern with giving up control will be reduced.

For example the day-to-day management of the farm can start being shifted to the successor generation years prior to the farm’s ownership transition even begins. This can and perhaps should be done little by little over time as the successor generation grows into a role of greater and greater trust.

Even though only some of the offspring will run the farm operation in the next generation, the farm’s ownership might be left to all of them.

When it is actually understood just who stands out as the next generation on the farm there are various possibilities, more uncomplicated than you would possibly imagine, to provide for everyone else fairly. First the family makes the choices then their advisors will highlight the way to accomplish it.

And while this might not be traditional, it’s also possible that the actual management, even the eventual ownership of the farm is left in the hands of key employees as opposed to family members.

Let’s imagine the kids are not excited about staying or returning to operate the farm after their folks retire. Maybe a young would be farmer in the local community who’d love to farm is given the opportunity to take over.

The retiring generation can act as mentors with the heirs providing insights and supervision.

There are several techniques, commonly used by their Main St. counterparts, in order to guarantee that key employees who may become the owners is the future stay on the farm during the transition period.

Such tools as employment agreements, non qualified deferred compensation contracts, stock option plans and change of management control contracts will be explained by your advisers once they fully understand your objectives for the future of the farm and the family.

Eventually through meticulous planning, the heirs will receive their inheritance and the young farmer will have the possibility of a lifetime, to own a farm – and actually be able to afford it.

I really hope I’ve provided some food for thought and motivation for action. The future will be the results of the decisions you will be making today.

Our farm succession planning toolkit provides a wide range of ideas and possibilities that will help you create the best future possible for the farm and the family.

Farm Succession Planning » Succession Planning

Your Farm’s Long Term Success Will Absolutely Be The Results of Those Decisions You Make Currently!

Recommended Reading

What’s the Connection Between Farm Succession Planning And The Farm’s Legal Organization?

Recommended Reading

The Farm’s Long Term Success Will Undoubtedly Be The Outcome of The Actions You Are Making Today!

Recommended Reading

What’s the Relationship, Farm Succession Planning And The Farm’s Legal Organization?

Recommended Reading

The Future Will Be, No Doubt About It, The Outcome of The Choices You Make Right Now!

Recommended Reading