Succession Planning for FarmersTax Professionals' Resource
February 3, 2014 — 1,924 views
Succession planning for farmers is an issue which they may have to face at some point, making it essential to resolve it in such a manner that the transition is smooth. For some farmers it is one of the most difficult decisions as they find it very hard to distribute their farmland equally among their children. Succession planning basically involves the transfer of management and possession of the farm. A successful transfer will ensure that all the members of the family remain happy.
However, this process is not all that easy as many times dispute occurs between family members regarding the portion and the size of the land allotted to them. The sooner this estate planning for farmers is done, the better it is for the family as they will have more choice.
The Process of Planning
There are certain steps, which if followed properly, can help each and every member of the family to understand how and why the division of land is being done.
- Assembly of the Family History And All Other Background Information
This process helps the farmers to know how many persons are involved and the current state of the farmland. This process will make it a lot easier for all the family members to communicate among themselves. You won't be able to go to the next step if this process of collecting all the important data is not done properly.
- Reviewing the Critical Issues
There are certain important issues that have to be addressed before proceeding any further, for instance, control, ownership, and security of the land. Not all the children of a farmer would want to continue farming. This makes it important to look after their needs too.
- Set Your Goals
Based on the review of the critical issues, you have to make some decisions so that you can focus on the goals and the broad objectives. Make sure that you do not compromise on your needs.
- Becoming Familiar with the Tools of Succession Planning
The final step in the process of planning is to get familiar with the tools that you will need in order to make your succession planning smooth. Some of these tools are security, life interests, will planning, life insurance, and business arrangements.
When all choices have been agreed upon, it is finally the time to put the plan into action. It will be better to list the job that has to be finished straightaway and the ones that can be followed up at some stage in the future. You must put this all in writing which will make it a lot easier to track and ensure that not even a single element gets neglected. Review your decisions every couple of years or whenever an important event takes place. The process of succession planning is a time consuming process and it can be a difficult period for all those who are involved. However, disregarding this issue might do more damage than good to families.