A couple weeks ago we had a post titled What Is Your Game Plan, highlighting basic steps to start establishing a business succession plan. Living in the Dairyland of America, I think it is safe to say one of the most common small businesses in Dane County is farming and agriculture.
It’s big business and with business comes the need for planning. That’s right; I’m talking about succession planning.
As featured in the May issue of Madison’s InBusiness magazine, Farm Succession Is Tricky Business.
This article highlights some of the common barriers and obstacles farmers deal with when transitioning their business. Although for the most part, farmers looking to transition the ownership of their business may follow the same basic steps of succession planning (as stated in our April 24th post), it gets a little more complicated due to the lack of liquidity in farm land and equipment. Add to that, a situation where there are multiple beneficiaries and you’ve got yourself a situation.
Who gets the land? Who gets the machinery? Do my heirs manage the farm? Do I liquidate or sell the farm to a non-family member? How do I transition this farm the way I want to but still be fair to all my heirs?
Do these questions sound familiar? You’re not alone. There are tools available such as Family Limited Partnerships and Limited Liability Companies that you can use to help structure the title of ownership on the assets to allow for a smoother transition.
I would encourage those of you in this situation to take a look at the article in InBusiness magazine. It highlights the more common barriers of succession planning for farmers and offers some good advice to curb some of the obstacles you may be facing.