Succession planning: get expert help and understand your options

Even if succession seems straightforward, as when passing on operations to a single heir, several steps are needed to facilitate the transfer of the farm from one generation to the next, says Trevor Dickinson.

- Trevor Dickinson.

Succession planning may require changing business structures and deciding between a direct sale and placing assets in the trust. In more complex cases, it might make sense to divide farming operations, enter into a contract with an outside farmer or sell the farm. There is no one-size-fits-all approach.

Because of the complex nature of a succession plan, a team that includes a lawyer and accountant is indispensable in helping to evaluate the legal and tax implications of different business structures and vehicles (such as trusts) used to transfer assets and operations.

A professional team will also be needed to complete the paperwork required to prepare a formal succession plan.

EVALUATING OPERATIONS

Once your family has established its goals for the future of the farm, including an estimated retirement date and a plan to shift operations and assets, your advisers will look at the current business structure and determine whether it can help you meet those goals, or if restructuring is needed.