Let’s Talk About Who Gets The Farm Before It’s Too Late
Suzann Enzian Knight and Katherine Fredette
University of New Hampshire Cooperative Extension
Purpose
To work with farm families to reduce the risk of losing the farm due to
nonexistent or stalled estate and farm succession planning.
Research
70% of farmers have not named a successor
70% expect to semi-retire or retire
45% have had no retirement discussions at all
55% expect to remain in their home
Farm business survival depends upon proper estate and farm succession planning, yet
Research Findings
• Transfer planning takes time and formal documentation
• Delegation to, and training of, a successor critical
• Communicating goals and values key to outcomes
• Farmers are considered experiential-social learners
Goals of Succession Planning
• Continuation of the family farm
• Meet expectations related to the transfer process
• Control of the farm management decisions formalized
• Security achieved for both generations
Steps to Estate Planning
1. Initiate the discussion
2. Take stock of the present
3. Develop objectives
4. Choose professionals
5. Consider alternatives
6. Review and modify
Background
•Farm families interviewed and video taped
•All saw transitioning the farm business as critical to the survival and profitability of the farm
• All had completed, or were 8-10 years into, the process
– 3 out of 3, older generation still involved in farm operations
– 3 out of 3, younger generation currently running the business full time
– 1 out of 3 had siblings not involved in the farm
– 2 out of 3 senior generation still owns the land
Farm Succession Risk Management Checklist
• Shared Vision – The Generation Together
• Preparation by the Senior Generation
• Preparation by the Next Generation
• The Family Glue
Assess farm succession risk in 4 categories:
Interview Questions
Farm Family Estate Planning/Farm Succession
Interview Questions - What is your name and describe your farm.
1. When did you start to have serious talks with your family about estate planning and transitioning the business?
2. What did you discover? How were you able to have honest and open discussions?
3. How can the farm succession process begin?
4. What was the best time and setting to have these serious discussions?
5. Identify 3 goals you wanted to achieve? What was the outcome?
6. How did things transition from family discussions to legal documentation?
7. What outside resources did you use?
8. What was the biggest hurdle? How did you overcome it?
9. If they were to give one piece of advice, what would it be?
10. How will the older generation be economically sufficient when no longer farming?
Shared Vision- The Generation Together
• Communicate about the future
• Share an appreciation for farm life
• Implement steps to perpetuate the farm
Preparation by the Senior Generation
• Formalizing transfer plans
• Documenting estate plans
• Communicating to the family
“The farm and the family are in a treacherous place if these steps
aren’t taken.”
Preparation by theNext Generation
• Capacity – education, skill and experience to maintain or enhance farm operations
• Interest – let the senior generation know your intention to farm
• Assure Senior Generation that transfer will be consistent with their personal goals
Farm Succession Risk Management Checklist
• Shared Vision – The Generation Together
• Preparation by the Senior Generation
• Preparation by the Next Generation
• The Family Glue
Assess farm succession risk in 4 categories:
Workshop Materials
• Posted on familyfarmfinances.org
• 6-8 minute vignettes
• Available for download
Results
• Tools to encourage farmers to begin or to resume the estate planning process
• Facilitated learning from each other the importance of estate planning and farm succession
• 24/7 online access to encourage communication around planning and goal setting
• Incorporated into workshops or used one-on-one for family discussions
Other Resources
• Farm Transfer Network of New England http://www.farmtransfernewengland.net/Resources/farmtransferplanning.htm
• AgTransition – create your transition plan [https://www.agtransitions.umn.edu/PublicPages/GettingStarted.aspx]
• eXtension.org
• Ag Risk Education Library http://www.agrisk.umn.edu/Library/Topics.aspx?LIB=AR
References
• Frishkoff (2009) Farm Succession Risk Management Checklist Online, Funded by USDA –Austin Family Business Program
• Family and Farm Connections :Communication in the Family (Purdue) downloaded from http://www.ces.purdue.edu/extmedia/ID/ID-239.pdf
• “Iowa Farmers Business and Transfer Plans” (PM 2074) by Ethan Epley, Michael Duffy and John Baker of the Beginning Farmer Center at Iowa State University.
• Transferring Your Farm or Ranch to the Next Generation (EB149), 2009 Montana State University Extension
• Jan Allan "Farmers as learners: evolving identity, disposition and mastery through diverse social practices". Rural Society. FindArticles.com. 12 Mar, 2010. http://findarticles.com/p/articles/mi_7083/is_1_15/ai_n28279068/
Project Team
Suzann Enzian Knight, M.O.E., M.S., CFP
Family Resource Management Extension Specialist
Katherine Bryan Fredette, CFP
Extension Program Assistant, Family Resource Management
University of New Hampshire Cooperative Extension
308 Pettee Hall, 55 College Road
Durham, NH 03824
Project Collaborators
Michael R SciabarrasiExtension Specialist, Agricultural Business Management
University of New Hampshire Cooperative [email protected]
John PorterExtension Specialist, Emeritus Dairy
Bob ParsonsExtension Associate Professor
Extension Ag Economist, University of [email protected]
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