Farm Table says:
This guide identifies that farm transfer is a two-way street – it has to work for both generations, those exiting and those entering. The publication is aimed at the next generation and presents the issues from the perspective of the incoming farmer. Suggestions and strategies to enhance the chance for a successful transfer are offered.
It espouses a step-by-step approach with exercises at each stage involving:
Step 1: Values and Goals – The first step is to clarify values and goals. Often, this is the hardest part of the succession planning process.
Step 2: What do you bring to the table? – A realistic self-assessment of experience, knowledge and skills, perhaps facilitated by an outside party, could be very useful. You should also inventory all tangible and intangible assets you may bring to the process.
Step 3: Evaluating Farm Opportunities – A realistic appraisal of the farm and transfer options will inform your options.
Step 4: The Basics of Farm Succession and Transfer – “The terms succession and transfer are sometimes used interchangeably in the context of business ownership turnover. From a more technical angle, however, succession often connotes intrafamily; in other words, a passing of a business between generations within the family. Sometimes it implies transfer of management only, and not a transfer of assets. Transfer more generally involves passing management, assets and income from one party to another.”
There are many components to farm transfer including:
- goal setting and family communication plan
- retirement plan
- estate plan
- management transfer plan
- land-use plan
- farm business plan
- asset transfer plan.
Step 5: Communication – To get the process going, you need to engage the senior generation and other family members in purposeful conversation and negotiation about how to transfer the farm business. This can be a challenging process, but with the right tools and preparation, you can set yourself up for successful outcomes.