One of the most important aspects of your farming business is the planning involved in securing its future. According to the 2017 Agriculture Census, 33 percent of farmers are over the age of 65. Without a proper succession plan in place, those farmers may not see their operations stay in production. Farm Credit’s partnership with Nationwide’s Land as Your Legacy program can help ensure the seamless transition of your farm to the next generation.
Below is an excerpt from Nationwide.
Farming and family are intertwined. That’s why developing an effective transition plan is important. With it, you can prepare for the future knowing that your agribusiness operation will be handled the way you want.
As an owner of a family farm or ranch, many of your assets are tangible items. Land, livestock and equipment may be difficult to divide evenly among your children or desired parties. And when the time comes for retirement, selling those assets to help pay off taxes and expenses can be equally challenging.
With a plan in place, you can gain confidence that the needs of your business, your family and your future will be met.
The five key elements of the transition-planning process are:
- Succession planning
- Business planning
- Risk management
- Financial independence
- Estate planning
1. Farm succession planning
In this phase, we'll think about what’s in the best interest of your farm. We'll give you the tools you need to hold a meeting so you and the next generation can decide who’ll be running operations in the future.
2. Business planning
We'll examine your operation and evaluate its profitability and health. That way, we can help you determine if the farm can support or grow to support multiple families in the future. Learn about key person benefits.
3. Risk management
You need to identify, address and prepare for risks. And we can help. We'll discuss if you should have a plan in place for long-term care expenses, or if supplemental income or insurance is needed by either generation. Learn about:
4. Financial independence
This phase includes a discussion about the current generation. We'll help you determine if you can afford to retire and perhaps transition to a mentoring role for the next generation. In this scenario, the current generation helps transition agreements and relationships, while the new generation learns the intricacies of farm management. See where your retirement progress stands by using the My Interactive Retirement PlannerSM.
5. Estate planning for farmers
In this last phase, our goal is to have a fully-formed plan in place for you. That way, you can work effectively with an attorney to create any documents you may need, such as business documents or beneficiary designations. Learn the estate planning basics (PDF).
Whether your farm has been around for several generations or you’re a first-generation farmer, we’re here to help you plan for what happens to your operation in the future. To start your journey visit https://nationwidefinancial.com/ag-financial-legacy/land-as-your-legacy - bonus points if you download and prepare for our meeting with this planning checklist.