Recently we have been discussing many topics related to farm succession planning, and there is still much for us to explore together. What are the three key takeaways to help ensure your planning process is successful? Start early, use a team approach, and be ready to adapt. Let’s talk about what each of these really mean.
1. Start Early
There is no such thing as starting too early. No matter how new you are to the idea of farm transition, it is never too soon to start learning, to build a team around you that can support your growth, nor to start thinking about what an ideal transition would look like for you.
Even as the new generation takes over the farm, we are often asked at this point to assist in the planning for their transition in the future. Why do they approach us so soon after just taking over themselves? They inevitably answer one of two ways:
- “I don’t want to go through the same stress and mistakes that our parents went through.”
- “We benefitted from a well-planned transition. This has helped us get ahead in the business plan of our farming operations.”
While the first answer remains the dominant one, there is a clear move towards earlier and more formal planning in the farming community.
No matter where you are in your journey, if you have not yet started the process, the best advice is to do so now.
2. Team Approach
Having the right team to help you navigate the complexity of transitioning is paramount. The right team includes a lawyer, an accountant, a banker and a financial advisor. They’ll work together (and with you) in an integrated fashion to ensure your transition planning is successful.
We’ve discussed the importance of communication in previous articles and should highlight it again here. An integrated team of professionals working on your behalf will communicate effectively together to ensure they are on the same page and deliver what you and your family needs
This team should be focussed on the agricultural industry and have experience serving farmers within your area.
3. Be Adaptable
Disruption has been occurring in many industries, including farming. To assume that a plan can be put in place, filed in a safe place and dusted off 30 years later in the hope that it is still relevant, is dangerous, and not something that we would recommend.
Not only is farming changing at a rapid pace, so are demographic attributes. Your children will likely not want to farm in the same way that you farmed. In fact, they may not want to work at all on the farm. Their situations may change over time reflected in their attitudes, desires and their own family dynamics. Are you prepared for differing views and the impact it might have on your farm? Considering the “what-ifs” and alternate arrangements if things don’t go as you had initially hoped is an important part of being prepared.
Finally, disruption and change occur in the tax landscape. As discussed in an earlier article, Bill C-208 may bring around planning opportunities that were not present until recently.
These three takeaways have been incredibly helpful in many farm transitions, allowing them to succeed in creating generational farm and family legacies.
Interested in Farm Succession Planning? Follow along as David Szalkai, our Insurance & Estate Planning Advisor, discusses a variety of different topics related to Farm Succession in our new video series.
Access the complete series here.
Tall Oak Private Wealth is committed to helping you and your family no matter what stage you are at in succession planning. Reach out to us today and see how we can help turn your plan into reality.
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