Approximately 17 percent of the U.S. population is a family caregiver, and most are losing…
Whether your prize assets are dairy cows, acres of cropland or manufacturing, a business succession plan takes a lot of time to map out. Business plans are often by-products of good succession plans.
Planning to hand over a business takes more than one meeting with one professional. It can take months, involve a number of professionals and require family meetings as well. The article from Dairy Herd, “Estate Planning Is A Process, Not An Event, ” explains that if you know someone who is working on their succession plan, expect them to be having more than a few meetings.
In fact, succession planning is a process. Ten years of time can fly by very quickly, so the earlier you can start having these conversations with your attorney, the better.
The amount of time needed to draft a solid succession plan is different for every family. If things are fairly straightforward, it may take only six to nine months. However, it’s not uncommon for this process to take a year or more.
That’s especially true in the ag sector, because once the good weather arrives, this process slows down to a halt—good weather means that everyone is focused on crop production.
There’s no magic age to start the process, but again, sooner is better.
You can spend your entire career building your business. However, very few people have really spent much time thinking about how they will effectively exit from it.
You may not be thinking of retiring or transitioning the farm operation for 15 or 20 years but having an idea of where you’re trying to get, gives you a better track on which to run.
Succession planning should happen well before retirement, so that’s why the best plans are flexible and adaptable.
Every plan is unique to each family’s particular farm operation and circumstances.
Even a simple operation will need the help of an estate planning attorney, a financial advisor, an insurance agent and a CPA. All of these professionals understand the pressures and expenses of the business and their knowledge can be used to create a plan that will work over the course of many years.
Things may change from the time you start working on a succession plan, to when it is finally completed. That doesn’t mean anything was done wrong—usually it means just the opposite.
Reference: Dairy Herd (January 15, 2019) “Estate Planning Is A Process, Not An Event”