Legacy Workbook

Farm Journal Legacy Project

Type: PDF
Knowledge level: Introductory

Farm Table says:

Handy exercises at end of each chapter and some insightful commentary/case studies at the start of each chapter.

This is a workbook designed to help you start navigating the succession planning process.

The contents of the workbook are:

Can we talk?

There are three broad reasons why family operations do not successfully transition to the next generation as a going concern:

  •  Incompatible estate planning
  • Insufficient capitalization
  • Failure to prepare the next generation for a leadership role

The primary purpose of succession planning is to promote, preserve and protect the family’s most valuable assets. A plan minimises uncertainty and allows farm families to control their destiny. It encourages family farm owners to plan for success and enjoy life.

You matter: 

Your success at transitioning the business to the next generation depends on the quality and the frequency of communication within the family.

By design or default?

Most farmers seem to have a good idea of what they want to achieve when they think about succession. Yet their ideas may not be clearly defined. Succession planning means turning intentions into goals, goals into actions and actions into results.

Is it time?

 Not sure if you’re ready to pass on the operation to the next generation? See if answering the following questions gives you some insight:

  • Is your business positioned for growth and development beyond the current owner?
  • Do you have an option date and a plan for achieving your retirement objectives?
  • Are you, your family, your associates, your suppliers, your customers and your banker certain that your business will continue through a generational transfer?
  • Do you have a financial plan in place for your business in case you don’t wake up tomorrow?
  • Do you have a trusted resource to guide financial decisions consistent with your wants and needs?
  • What have you done about succession planning?

The right foundation: For a farm to survive through multiple generations, a business plan must include specific guidelines for decision making. It must be flexible and vigorous enough to adjust to changing conditions, shifting resources, regulative initiatives and evolving abilities.

Prepare to lead: Identifying one child as a successor is challenging—especially when multiple family members are involved in the farming operation. It may be that only one child works in the business but does not have the skills to manage the operation.

A key to continuity: 

A buy-sell agreement may be the most important tool for maintaining the integrity of a business entity in a succession planning engagement. Buy-sell agreements may also be referred to as business continuation agreements, shareholder agreements, stock redemption agreements, partnership liquidation, retirement agreements and cross-purchase agreements.

Ready for retirement?

When farmers discuss retirement, there is often a hesitation in their voice. It’s never clear if that’s due to a love for their occupation or if it’s because they’ve neglected to plan for “the day.”

Protect the farm:

When farmers discuss retirement, there is often a hesitation in their voice. It’s never clear if that’s due to a love for their occupation or if it’s because they’ve neglected to plan for “the day.”

Draft your team: 

Use this brief interview guide to help you identify an adviser who can facilitate the succession planning process for your family.

The miracle of commitment:

When a family dedicates its time and resources to succession, we see major and immediate changes in its collective behavior.

2010 - United States - Farm Journal Legacy Project
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