Author Alan Lakin once said: “Planning is bringing the future into the present so you can do something about it now.” Over the past two months, Ohio State University Extension has helped families transform their future into the present with regional “Planning Your Farm’s Future” workshops.
The aim of these workshops was to help families plan for the future management and ownership of the family farm. Each farming family had the opportunity to learn more about transition planning, how to navigate difficult family discussions and learn about different estate planning tools and strategies.
We asked each participant to pause and reflect on the future of their farm. We asked many tough questions, and through discussion, family planning papers, and reading resources, we tried to lay the groundwork for important discussions about transition and estate planning. Today, I'd like to share with you some food for thought from these workshops.
What is your goal?
First and foremost, the older generation (or those who own the assets) must decide what their goals are for the future of the farm. Is your goal for someone from the next generation to own and manage the farm in the future? Or will you leave the farm assets to your heirs to manage as owners or as a liquidation inheritance? What do you want the farm to look or be like now that you're no longer here?
What kind of process will you leave behind?
If your goal is to have the next generation run the farm in the future, have you identified and been equipped for a son, daughter or grandchild who wants to run the farm? If so, have you taken the necessary steps to train them to manage all aspects of the operation? What type of work will you leave behind? Is it profitable? What current income does it generate? Will the income be sufficient for a family member to undertake this profession full-time? Or will it be a part-time administrative operation? Our team advises you to complete an in-depth financial and regulatory analysis. What are the current strengths, weaknesses, opportunities and threats of the business? What are the possibilities of the farm in the future?
What do your heirs think?
Have you taken the time to ask your children about their thoughts on the family farm? What are their hopes and dreams for the farm? Would they be interested in owning or managing the farm in the future? If they had to take over the farm today, what would they be most worried about? What changes need to be made so that they have continued interest in the farm? What are some of their weaknesses that need to be addressed before they farm on their own in the future? What are their expectations about the appropriate time to transfer management control?
What elephants are in the barn?
Often, there is a reluctance to discuss the future of the farm due to “non-negotiable” family topics. Communicating difficult issues can be difficult. Stress, family burdens, generational or gender differences and talk from relatives not involved with the farm can make these discussions more difficult.
Our team encourages families to analyze their communication issues and stressors and take time to learn about the elephants in the barn that may be holding you back from having important conversations. Here are some examples of “elephants”. I don't trust my new daughter or son-in-law. If I leave the farm to my child, what happens to him upon divorce? I want to leave the farm for my son, who has been working here for thirty years, but I don't want to leave my other children. How can I be fair to all my children? My husband and/or business partner don't agree on what should happen, so we've decided not to talk about it. What happens if my husband remarries after I die?
Life tape measure
Where are you on your life's measuring tape? One farmer told me one day while he was measuring his slate pieces, he realized he had already put 70 inches of his life in the rearview mirror. He said that, according to statistics, he only had seven inches left so he decided to retire while he still had time to enjoy it!
help you
The Ohio State University Extension recently received funding to start Ohio Farm Analysis Services at The Ohio State University. The goal of this program is to find solutions to conflicts affecting Ohio farms and farming families. This program was established in October 2023 with funding from the USDA Farm Service Agency's Certified Brokerage Program. More information about this program can be found at: https://farmoffice.osu.edu/ofrs. Additional farm succession resources can also be found at: http://farmoffice.osu.edu. Have a great February!
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