Farm Succession Planning

Where are we now? Where do we want to go? How do we get there?

These three questions are the foundation for strategic business planning. The big three, as we call it, are a cornerstone of Farm Succession Planning.

The growing season is fast-paced, and life is fast-paced. July is flying by as fast as the corn is growing. It's important to step back and see the bigger picture. What do we want our futures to look like? From an elevation perspective, this would be like a 30,000-foot view.

Jim Jansen, with Nebraska Extension, has different questions that bring us closer to ground level: What assets do you have? Who do you want those assets to go to? What are your biggest concerns about your assets and who you want them to go to?

Having this conversation gets to the heart of what it takes to keep farms within families.

We are talking about transferring ownership and management of a farm business to the next generation or another successor. How can we achieve family peace and financial security or minimize taxes through transition? Whatever your goals, we want to identify and work towards accomplishing them.

Attorneys can utilize several legal tools to structure a farm's ownership and management. Entities types vary between LLCs, Partnerships, C-Corps, S-Corps, Trusts—the list goes on. All of these structures have advantages and disadvantages.

How do you know what is best for you? Well, what do you want the farm to do for you? What do you want to happen? The answers determine which direction to go.

Does the farm currently serve as a retirement asset? Are there kids involved that want to maintain a family legacy? Will the farm provide supplemental income?

The questions proposed in this column will allow us to begin thinking about the future in a way that is down to earth. Communication and conversation is essential for successful farm succession.