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Have you thought about what happens to your farm after you die?

You have worked hard to establish your farm and to build up the success. As the success continues, you have to start making plans for your farm's future. One of the things that you should do is to create a succession plan.

A succession plan outlines what is going to happen to the farm when you retire or die. It sets up the protocol for the change of management or ownership. This helps to ensure that all of your hard work isn't lost when you aren't the one who is running the farm. Here are some points to remember about farm succession plans:

Succession plans are more than just paper

The succession plan that you create has to be spelled out on paper, but the work doesn't stop once the document is made. Instead, you have to get difficult issues worked out before the succession occurs. Around 25 percent of failed management transitions take place because the successor isn't prepared to take the reigns. Around 60 of successions that don't work are due to unresolved issues that are already present prior to the start of the process.

When your children or family takes over

Leaving the farm to your children or family members means that personal issues can creep into the succession period. You should discuss anything that is causing tension between you and the successor to ensure that there is a clear plan for the business. Some of the matters to think about include how the new farm manager or owner will work the farm. Younger people tend to want to work fewer hours while older generations favor working during almost every waking hour.

Prepare yourself

If your succession plan is for your retirement, decide how you want to handle the transition. Are you going to remain an active part of the farm and slowly move away from the daily operations? Are you going to just walk away and be a silent partner who doesn't deal with the farm at all? Deciding this right now can help you to think about how you are going to handle this transition. It isn't always easy to watch someone else make decisions about the farm that you built from the ground up.

Not a one-and-done plan

You need to review the succession plans at least every five years. If there are significant changes in the farm's bottom line, if your family composition changes, or if your plans change, you should review the succession plans at that time.

Source link: http://www.wisfarmer.com/story/news/2016/12/14/farm-succession-plans-living-documents/95421184/

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