You’ve poured your life’s work into your farm so have you thought about how you’ll preserve the agricultural legacy you’ve worked so hard to build?
According to a study conducted by Iowa State University, an estimated 70% of farms and farmland will transition ownership in the next 20 years and fewer than 50% of farmers have estate plans. With less than 11% having succession plans in place, consequences of a failure to plan can be severe.
Why is a succession plan important?
Succession planning requires asking difficult questions and engaging in uncomfortable conversations. In fact, farmers often avoid preparing for succession because the process is stressful but having a succession plan ensures your business will transition from one owner to the next seamlessly and your legacy will remain long after you’re gone.
Delayed succession planning can lead to complex and challenging problems that result in:
- heirs becoming owners who are incapable of running the farm business
- unequal treatment of heirs- especially if some reside on the farm and others do not
- the farm being partitioned off to accommodate heirs who want to "cash in" on their share of the business
- inheritance taxes and other fees that cripple the farm and its new owners
To avoid these complex and challenge problems we suggest, taking the simple steps to get started:
- Schedule a family meeting to discuss goals for the future of the farm
- Build a team of expert advisors including a lawyer, accountant and financial planner
- Review all rent/lease and buy/sell arrangements
- Make a list of assets
- Have a current living will in place
- Establishment of business entity
- Take action
Don’t let poor planning ruin what you’ve worked so hard to create.
Succession planning always starts will a conversation. Our experienced financial planners are here to walk you through the steps you need to take to preserve your legacy and prepare for a successful retirement. Our planners excel at taking the time to listen to you goals and respect your wishes.
For more information on succession planning or to start the conversation, please visit www.mylsb.com/Transition.
Lincoln Savings Bank, Member FDIC