Your Farm's Future Will Be The Result Of The Decisions You Make Today!

The key to your farm's long term success is the ability (no not the ability but the

willingness) to do what's required in order to pass the farm from the current senior generation to the next. And while the next generation is typically someone you are related to, it need not be. It could be a valued employee or even someone unknown to you today.

In either case the farm must continue to operate without being reduced by various unseen and generally unnecessary costs. So many strategies exist to reduce, divide, and delay the largely unnecessary transfer costs only a really poor business person would not take advantage of them.

Because failure to properly consider what you want the future of the farm to look like, and then have the required strategic conversations with your family, will likely continue the inertia that has kept you from taking the steps that need to be taken. The end result, a lack of planning and documentation causing not only a loss of momentum but a loss of money and even the farm itself.

Obviously passing down the farm is important to you or you would not be reading this article right now. When you see that it's really a matter of talking it out with your family - will you do something about it, or not? Often people hesitate to get started, even having that first family discussion because they think that management succession and ownership transition are the same when it comes to farm succession planning.

They are afraid they'll lose control or something if they begin taking action today. In fact it is the other way around.

It can take many years to train the successors before the senior generation owner feels comfortable handing over the complete day-to-day operation of the farm. Over time however as they get more confident in their successors abilities their fear of giving up control will be reduced.

For example the day-to-day management of the farm can begin being shifted to the successor generation years before the farm's ownership even begins. This can and perhaps should be done gradually over time as the successor generation grows into a position of greater and greater trust. And while only some of the children will run the place in the next generation, the farm's ownership can be left to all of them.

Once it is actually known who will be the next generation on the farm there are numerous ways, less complicated than you might imagine, to provide for everyone else fairly. First the family makes the decisions then their advisers will show you how to accomplish it.

And while this may not be typical, it is also possible that the management, even the ultimate ownership of the farm is left in the hands of key employees rather than family members. Let's say the kids are not interested in staying or returning to run the place after their folks retire. Perhaps a young person in the neighborhood who'd love to farm is given the chance to take over.

The retiring generation can act as mentors with the heirs providing insights and supervision. There are numerous techniques, commonly used by their Main St. counterparts, to assure that key employees who may become the owners is the future stay on the farm during the transition period.

Such tools as employment agreements, non qualified deferred compensation agreements, stock option plans and change of management control agreements will be explained by your advisers once they fully understand your objectives for the future of the farm and the family.

Over time through careful planning the heirs will receive their inheritance and the young farmer will have the chance of a lifetime, to own a farm - and actually be able to afford it.

I hope I've provided some food for thought and motivation for action. The future really will be the results of the decisions you are making today.

by: Wayne Messick

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