During these trying and unprecedented times, estate planning has been a hot topic. But for farm owners, estate planning is particularly important because it will incorporate a transition plan for the farm – should the unexpected happen.
Is a transition plan needed?
As the owner of the family farm, it’s important to have a transition plan in place. You probably don’t want the business you’ve built to die with you. If something were to happen to you, what would happen to your farm? Who would run it? Who would inherit it? A transition plan creates a blueprint to ensure things run smoothly after you pass. It can help to avoid family squabbles and prevent the orderly liquidation of the farm’s assets.
What does a transition plan do?
The transition plan forms a part of a farm owner’s full estate plan. It is the guide to how the farm will transition to the next generation. An estate planning lawyer will work with you to analyze your current situation and allocate resources in order to help sustain the farm for future generations – as well as provide for retirement. In addition to outlining the inheritance of assets connected to the family farm, it will also designate managerial control. Ideally, the transition plan will include a business plan on how to operate the business – including supplies, vendors, etc.
For farm owners who do not involve their family or that do not have family, transition planning is likely about creating a legacy in that business itself. However, for those with family farms or who employ family in their business, having a transition plan as part of an estate plan is even more important. It will help ensure that your family will not fight over the business when you pass, and it will help to provide for the family you love.