Some people plan, and then plan some more, but never do anything with the plan. Then there are others that never plan and live each day, one day at a time.
Farming takes planning. A lot of planning. Whether for next year’s crop, expanding a herd, buying land, constructing buildings, starting a new venture, or upgrading equipment, farmers are nearly always engaged in planning to keep the farm on track.
But farm transition planning — that is, planning for what happens to a farm business and its family from one generation to the next — is a whole different kind of planning. And it’s one type of planning farmers often avoid.
The following information is from the Farm Office Team at Ohio State University.
According to the team, farm transition planning can be challenging and uncomfortable, perhaps because it involves dealing with death, uncertainty, and difficult family situations. But like planning for the next year of production, farm transition planning is critical to a farm’s success.
With good planning, a farm family can protect farm assets, implement family and business goals, and ensure a smooth transition of a viable operation to the next generation. It’s the kind of planning that can pay off big.
Their Planning for the Future of Your Farm law bulletin series can help with this important planning need. In this series, they explain the legal tools used for planning and present strategies that can address a family’s goals.
The entire set of bulletins in this series is on the Farm Office website at go.osu.edu/farmplanning. Reading the series is an important first step that can lead to creating a plan for the future of your farm.
The authors of the Planning for the Future of Your Farm Series are Robert Moore and Peggy Kirk Hall, Attorneys with OSU’s Agricultural & Resource Law Program, and Evin Bachelor and Kelly Moore, attorneys with Wright & Moore Law Co. LPA. We hope you will find the series helpful in your efforts to plan for the future of your farm.
What’s in the planning for the future of your farm series?
1. Farm Transition Planning: What it is and What to Expect The concept of farm transition planning, common terms, what farmers can expect from the transition planning process, and how to prepare for it.
2. The Financial Power of Attorney A Financial Power of Attorney authorizes someone to make financial decisions for another. We explain the different types and how they can help a farm business.
3. The Health Care Power of Attorney and Advance Directives Medical and end-of-life plans can ease decision making uncertainties for families. This bulletin explains the Health Care Power of Attorney, Living Wills, Donor Registries, and Funeral Directives.
4. Wills and Will-based Plans A will is a commonly known tool for distributing property. This bulletin explains different types of wills and how they can be used in a farm transition plan.
5. Legal Tools for Avoiding Probate We review legal tools that transfer assets upon death and avoid probate, including beneficiary designations, payable on death accounts, transfer on death designations, and survivorship deeds.
6. Gifting Assets Prior to Death Gifting is one way to transfer assets to the next generation. In this bulletin, we discuss how gifting works and when it can be advantageous to incorporate gifting into a transition plan.
7. Using Trusts in Farm Transition Planning Trusts are popular tools in farm transition planning. In this bulletin, we explain how trusts function and highlight how they can meet family and farm planning needs.
8. Using Business Entities in Farm Transition Planning Many farms have business entities for liability or tax purposes, but business entities can also enable transition of a business to the next generation. We explain how in this law bulletin.
9. Strategies for Treating Heirs Equitably Whether heirs should inherit assets equally or equitably is a challenging dilemma for parents. We present strategies for equitable distributions of assets in this bulletin.
10.Strategies for Transferring Equipment and Livestock Equipment and livestock can be more difficult to transfer than other assets. In this bulletin, we review special considerations and strategies that can help minimize the challenges of these transfers.
11.Strategies for Addressing Special Family Needs Whether a disability, substance abuse, gambling, or second marriage, many farms have special family needs. Strategies that provide solutions to these types of needs are the topic of this law bulletin.
12.Strategies for Long Term Health Care Needs Farmers today must be aware of the possibility of long-term health care costs. We review strategies for addressing the need and reducing its impact on the farm and farm assets.
I encourage to read through this information. I would also recommend putting on your calendar, the dates of “Farm Office Live”, which is a programming opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues from faculty and educators with the College of Food, Agriculture and Environmental Sciences at The Ohio State University.
Future dates will be September 22, October 21, November 8, and December 16. All programs are presented in a webinar format beginning at 10 a.m. on each of those dates. You can register for the events at https://farmoffice.osu.edu/farmofficelive.
Tony Nye is the state coordinator for the Ohio State University Extension Small Farm Program and has been an OSU Extension Educator for agriculture and natural resources for over 30 years, currently serving Clinton County and the Miami Valley EERA.