Farming is often a very family-oriented industry. In fact, farms are some of the most common small businesses to get passed down from one generation to the next. Children will grow up working on the farm and take over when their parents want to retire. Sometimes, there are multiple generations involved.
To help this process go smoothly, it’s important to create a farm succession plan. Here are a few key things to ask while going through this process.
Who has the right skills and abilities?
First and foremost, consider the skills that your children have and whether or not they’ll be able to run the farm and make it profitable. Do they have the required knowledge? Do they need more training? It’s important both to identify the right person and to start early so that they can get training on the job.
Who wants to be involved?
Additionally, multiple children may be involved in this process. Do you want to leave them equal shares to keep things fair? Or do you have a certain beneficiary in mind that you want to put in charge? Perhaps you even want to give specific roles or jobs to certain individuals.
What happens to the farm’s assets?
Finally, consider the assets that the farm owns, which may be extensive. They could include real estate, farming equipment, machines and livestock. In some cases, certain assets may be sold or liquidated. In other cases, 100% of the assets may be passed down to the next generation.
Exactly how your succession plan works is going to be unique to your farm and your family. Just be sure you know what steps to take to set it all up.