Farm and Ranch Succession Planning: 3 Steps to Get Started

Every farm or ranch owner works hard to build their operation. And whether you’ve spent a lifetime building your farm or ranch, or you’re just starting out, it’s never too late to start farm succession planning. Thinking about family farm transition to the next generation early can help you smooth the transition of ownership, and that will ensure that your legacy is continued. 

Of course, this isn’t an easy process. Estate planning for farms takes time, and it can be complicated. Family farm succession planning can bring up a lot of emotions and complexities. But a well-made succession plan can ease the process and the complications — the legal, financial, emotional and family dynamics — of transferring your farm or ranch. The sooner you begin, the better.

So, if you’re ready to start the farm and ranch succession planning process, here’s where to begin. And remember, a qualified professional at Farm Bureau will be happy to talk through this with you at any time.

Why Should I Start Thinking About Succession Planning Now?

Did you know that nearly all U.S. farms — 95% of them, in fact — are family-operated? Furthermore, much of that farmland will change hands in the near future. Seventy percent of farmland is expected to change hands in the next 20 years, and 40% in the next 15 years. That’s a lot of change, and it’s important to prepare the next generation now.

Why? Because farming and ranching are more than just jobs — your agricultural business is your legacy. You cherish this operation, maybe for your lifetime, and you want to see it  continue among your family’s future generations. A generation or two ago, passing on the family farm or ranch was a much simpler process because land values were lower, operation size was smaller and more family members remained involved in aspects of running the farm or ranch. But now, it’s more complicated, and requires more forethought. 

Three Steps to Beginning the Succession Planning Process

Step 1: Start the Conversation

As they say, a journey of a thousand miles begins with the first step — and a big task like succession planning does, too. Having the initial conversation with your family might seem daunting, but it’s the place to begin. Talking with your whole family early on can help you set appropriate goals, understand expectations and create a path for a smooth transition. Find out what your family members want, communicate your expectations and get everyone on the same page. 

Step 2: Identify a Successor and Set Goals

You can’t have a strategy without knowing what you’re trying to do. To develop an effective farm and ranch succession strategy, you’ll need to define goals. Identifying a successor and dividing assets can be a tough subject, so the more time you have to plan and set expectations for your family, the better off you — and they — will be. Take some time to sit down and identify your desired end result, and then you’ll have a better chance of getting there.

Step 3: Create a Team

Because the succession planning process can be complex, it’s essential to have a team who can advise you on best practices and help complete the right paperwork for a smooth transition. Your Farm Bureau agent and a financial advisor can help manage your team of resources.

You may want to consider adding an accountant, a lawyer, a financial planner and a lender to your team. Having the right people behind you will ensure that you don’t miss any steps, and that everything goes smoothly.

Plan for Tomorrow, Today

It’s never too early to start planning your strategy. Connect with Farm Bureau to talk to an agent or advisor and learn more. Together, you’ll map a strategy that fits your unique needs and goals.