Nationwide: The Basics of Farm Succession Planning
Good business management includes planning for the future. With regards to your farm, where do you want to be one year from now? Five years from now? What will happen when you retire? Have you made long-term retirement plans? With so many things to think about, it can feel overwhelming. It’s important to have a solid plan for transitioning your farm to new ownership. Southern States®, together with Nationwide® Agribusiness, offers valuable information about farm succession planning and its importance in preserving your family legacy.
Most people don't like to talk about retirement planning. It seems too far off to worry about, and there is so much to get done now. Plus, it's just too difficult to think about no longer being involved and losing control to a family member or even an outside buyer. But don't worry, succession planning makes sure that, when you are ready to retire, the transition will be smooth and fair to all family members involved.
How does succession planning differ from estate planning? Estate plans concentrate on the financial aspect of the business and lessening the tax burden faced by your heirs. Successions plans, an integral part of estate planning, focus on the future of the farm operation. When planning for retirement, there are multiple options to be considered: you can transfer or sell ownership to a family member; liquidate farm assets, equipment, livestock, and even sell the land; rent or lease the land and equipment; or find an outside buyer to purchase the business and the land.
For many reasons, succession planning can be an emotional roller coaster. Most farms are a family-run business that span several generations. You need to think about not only what is best for you, but you must also consider your family's role in the transition. Do you have a family member who wants to take over the operation? What do you need to do now to ensure this individual has the knowledge and training to be successful? Are there other siblings who want ownership? Is there pressure to sell by relatives who don’t share your love of the land? Having a solid plan can mitigate much of the emotion involved in changing ownership of a family-run business.
What retirement goals do you and your spouse have? Do you want to stay involved on a part-time basis? What amount of income will you need to cover retirement and health care expenses? With so many factors to consider, it is important to rely on the advice of experts when planning your exit strategy. Enlist the help of qualified professionals who can offer sound advice without being emotionally involved. In addition to your attorney, a financial or estate planner who specializes in farm succession planning is key to creating a solid retirement plan. You should seek advice from your banker and your accountant regarding the financial aspect of your farm business. If there are differing opinions amongst family members, you may need a moderator to help with family discussions.
With careful preparation, you can ease the transition of your farm ownership to the next generation. Fortunately, there are resources available online to assist with the initial planning. The Land as Your Legacy site has various resources to help you get started. For over 100 years, Nationwide® Agribusiness Insurance has been serving the agribusiness community and is the #1 farm insurance company in America.
Special Member Savings
At Southern States®, we are proud to be a farmer-owned cooperative. Southern States has partnered with Nationwide® to offer Southern States Cooperative member-producers in North Carolina and Virginia special discounts on farm insurance. In addition to giving you exclusive insurance savings, we're also joining forces to support the cooperative that means so much to you.
Nationwide® Agribusiness is the number 1 insurer of farms in the U.S. and a leading insurer of commercial agribusiness. Go to nationwide.com/southernstates to find a local agent.