Where do you start when it comes to planning the future of your farm or ranch?
The first step is to discuss it with your family. The following questions may be helpful to explore, and we encourage you to first answer them from your perspective. Then ask your family members to answer them from their perspectives. You'll get the most benefit if you get together as a family to discuss your answers.
You'll see in some questions that we refer to the "senior generation" and the "next generation". We suggest that you define those terms so they make sense for your family before you start answering questions. (Generally, the family members who currently own and control the farm or ranch wil; be the senior generation. Those who would take over ownership and control at the retirement, disability or death of the "senior generation" will be the "next generation".)
At your request, we can provide a PDF version of these questions.
- Does the senior generation want to continue the farm or ranch?
- Does the next generation want to continue the farming or ranching operation?
- Is there a mutual agreement on what the farm or ranch will look like in the future?
- Does the next generation currently have input on decisions impacting the farm or ranch?
- Is the next generation capable of assuming ownership and management of the farm or ranch and prepared to do so when the transition occurs?
- Do you have a defined business plan for your farm or ranch that outlines the key people and their roles and responsibilities?
- Is your family able to conduct a productive business meeting pertaining to the farm or ranch without heightened emotions?
- Have you assessed the total value of your business within the past 5 years?
- Have you planned for the impact that an illness or disability could have on the financial strength and operation of the farm or ranch?
- Have you thought about the effect that a marriage or divorce would have on your operation?
- Will the farm or ranch be able to financially support the next generation of family owners?
- Is the senior generation prepared and willing to relinquish control of the farm or ranch due to retirement, illness or disability?
- Do you have up-to-date written business agreements and funding to facilitate the transition of the farm or ranch?
- Have your legal documents (wills, deeds, trusts, etc.) been reviewed within the past 3 years, and do all key people know where to locate them?
- Are you prepared for the possible tax consequences and expenses that your farm or ranch may incur in transition?
- Has the transition plan for the farm or ranch been shared with all key active and nonactive members of the operation?
