AGRICULTURE

Succession Planning Do's and Don'ts

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Do

• Begin your succession planning several years before your expected retirement

• Address the issue of fair (equitable) vs. equal division of the farm early in the process -especially if there are non-family members involved

• Prepare a legal will early.  If you do not have a will, the court will decide for you.

• Get a “quarterback” involved early; someone who understands the big picture of farm succession.  They can help the family begin discussions on succession issues.  Family members must feel comfortable.

• Consider the tax implications, but don’t emphasize these as the most important thing.  Determine the best process to transfer the farm and still have it profitable and viable while paying as little tax as possible.

Do not

• Feel that the plan has to treat all children/next generation equally; fair does not necessarily mean equal (farming children vs. non farming children)

• Maintain control over all aspects of the business.  Your successor will need the freedom to make decisions and put his or her own stamp on the business

• Pull all your eggs into one basket.  Plan ahead, think early about retirement, save and invest off-farm so that you will have options in the future.

 Source: This article was written by the OMAFRA.  It is used here with the permission of the OMAFRA.  All rights reserved.

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