What is in this article?:
More About:
Transition tips:
1. Plan early. Chad Miner, attorney with Miner & Lemon LLC, Warsaw, IN, says that plans are adaptable and can be changed as time goes along. But what’s important is to take the steps to put a plan in place, even if it’s just a will and naming powers of attorney.
2. Set up an LLC or a trust. Putting the land into an LLC can reduce confusion and complication down the road when it’s time to pass value and assets along. “You can set up a trust with specific provisions to protect assets being inherited, and also to ensure that the spouse’s 50% interest in the marital estate is frozen for the younger generation to have.”
3. Name a successor. “Your plan may not turn out exactly as you pictured, but if you don’t plan for a successor, the heirs may just rent out the land or sell it to the highest bidder, and that’s often not someone young. That leaves one less family in the community. There’s value in having people take over who are young, rather than existing, established operators,” says Dave Goeller at University of Nebraska, Lincoln.
5. Enroll in a matching program. (See related story, page 6.) “Most matching programs have three to five times more beginning farmers than existing farmers looking for successors,” Goeller says. These programs allow for mentoring and smooth transitions.
6. Communicate. If there’s one lesson to take away from transition planning, it’s communication. “Lawsuits, fights and families not speaking to one other is common,” says Goeller. “Communicate and make sure all parties understand the plan. Farmers aren’t overly verbal to start with, and many times the younger generation doesn’t want to bring it up.
Miner agrees. “If the children have an opportunity to know ahead of time what’s going on and what decisions have been made and why, the process will be a lot smoother,” he says. “Having the opportunity to bring those things up with mom and dad is a good thing to do.”
