4 Things You Need to Know About Farm Succession
So the day has finally come: you’re ready to transition your farm to the next generation. It’s an exciting time in your life. But it’s also a stressful one. There’s a lot of uncertainty surrounding farm succession and how your family fits into it.
Farm transition planning can help you make sure your agri-business carries on from one generation to the next. Check out the following tips to help create an air-tight plan.
1. Become a Farm Succession Scholar
Transitioning your farm to the next generation is a huge decision. To make sure you start your succession plan on the right foot, research your options. Start reading as much as you can on the topic, and reach out to people you know.
Talking to a neighbour or friend who transitioned their farm recently can give you unique insights into their experiences.
But remember these are highly personal stories. Each succession plan is unique to the farmer, so what they did might not work for you.
2. A Credit Union Can Help
Not every bank is equipped to help you through this major transition. The Big Bank’s priorities lie in the big cities. They’re not invested in your farm’s future even though they may offer farm succession planning.
A credit union that specializes in agri-business has your interests at heart. A local credit union will work side-by-side to develop a comprehensive legacy plan.
If you’re ready to find out what a legacy plan from a credit union looks like, you can learn more at Chinook Financial. As a local union with a dedicated agri-business department, it helps you tackle the tough questions and anticipate future needs.
3. Communicate Freely with Your Heirs
No succession plan is complete until you speak with the people you expect to take over. Communication is key to understanding your expectations and their wishes.
This isn’t a conversation to have over text or email. Set up a time when you and your potential heirs can sit down and talk in person — whether they’re family, friends, or employees. A formal setting will give structure to this meeting, so everyone has the opportunity to address their needs.
The challenge is treating everyone fairly. Keep in mind some of your children may not want to work on the family farm, or all of them may want to take over the farm together.
4. Get to Know Your Finances
It may be a family farm, but your farm is still a business. You need to treat it as such. Make sure you dive into your finances, so you understand your cash flow. You should know how much your farm has produced in the past, so you can accurately predict how much it will produce in the future.
Getting to know your finances will also help you work out a plan that supports multiple families — from the next generation taking over to yours in retirement.
One of the toughest challenges of your farm career is how the business will change hands. An organized approach is essential to making this transition profitable for everyone involved. Make sure your farm survives the transition by committing to a comprehensive farm succession plan.