I was recently speaking with some folks from up in Grace, Idaho and they are deep into the Spud harvest. All across this great country as summer turns to fall; farmers are reaping the fruits of their labors. While many of our nation’s farmers will be successful at bringing in a bountiful harvest, the statistics indicate that same success does not exist in transferring the family farm to the next generation. Approximately 96% of the farms in America are classified as family farms. However, only about 30% of those farms will transfer successfully to the next generation and less than 10% of those will make it to the third generation.Just like your success in the fields, success or failure in transitioning your family farm will be highly dependent on the time and effort dedicated to planning for the transition. The first question you need to answer is: Do I want to transfer the farm as a “viable business” or simply as a group of assets? In other words do you want to see the farm business and assets transferred as a going concern or do you simply want to divvy up the assets among your heirs. This question is pivotal as all other planning will hinge on its answer. So as you are working today, give some thought to what will happen to the farm when you are through. Death, disability, or retirement; one of these events will cause you to exit the farm operation. Are you prepared? What will be the harvest? Do you want to transfer the farm as a legacy to the next generation?“If you don’t know where you’re going, you’ll probably end up somewhere else” – Yogi Berra
Photograph of field in Caribou County, Idaho, courtesy of Sara Nelson Hallock.© 2013 Sara Nelson Hallock, all rights reserved.