Now Is The Time To Tackle That Succession Planning Resolution

Jan. 02--Planning for the future of a farm, ranch or business can be a lot more complicated than just making a will, especially if there is more than one heir.

Whether the estate is big or small, an inheritance is more than money or property. Many farms and ranches in our area are legacies that have survived several generations.

"You want that to continue, so one day your grandchildren can walk the land their great-grandparents did, and take the same satisfaction in knowing what they do every day is a vital part of our economy," encourages Farm Bureau. "Every family situation is different, and the interest of the overall health and success of your agricultural operation, the best thing you can do is take a step back and look at your succession goals as critically and unemotionally as possible."

The division of assets, sharing control and management decisions, and transferring ownership are things to consider while making setting your succession goals, according to Farm Bureau.

"When doing estate or legacy planning, it is imperative to identify what the final goal is. Each person's plan looks different based on their needs and goals," says Whitney Gum, CPA and tax manager for ENJ Financial.

"For example, should the assets be held for end of life care, passed on to children, donated to charity, or perhaps there is a business or family farm to transition to the next generation. People work hard their whole lives to build a life and accumulate assets, it is so important to have a legacy plan in place to make sure everything they've worked for is preserved for the next generation or available for their needs."

Gum explained 2018 and 2019 gift and estate exemptions are up drastically from 2017. A person can gift or pass on through inheritance a certain amount in their lifetime before they have to consider tax liability. Strategic planning is important, especially if there are large assets.

Farm Journal Legacy Project has several printable downloads online including a succession planning action guide, family meeting agenda, conversations starters, a goals clarification worksheet and more.

The Succession Planning Action Guide has a checklist of things to consider and possibly take action on beginning with the decision to secure the legacy. Identifying a facilitator, scheduling consultations and conducting some initial research on legalities are also suggested.

The Family Meeting Agenda includes discussing roles, responsibilities and how each person may be affected during transition. Other issues to discuss will be financial security and estate tax provisions. Common objectives are operational integrity and preparing the next generation for leadership.

According to the the Farm Journal Legacy Project, common obstacles to work through include differentiating between equal and fair, active and inactive family members and in-law participation. Developing a family employment policy with job descriptions and accountability reviews is also a suggested discussion topic.

The Conversation Starters worksheet recommends regular family meetings, "Your success depends on the quality and quantity of communication within the family."

To start succession planning, an accountant, insurance agent and investment advisor can help get started. For more information on Farm Journal Legacy Project, visit farmjournallegacyproject.com

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