Far more than just passing the keys to the combine over, farm succession planning involves the vital transfer of knowledge and ownership to the next generation. The earlier you can start the succession planning process, the better.
This gives you time to develop a thoughtful plan with everyone’s best interest in mind. “You don’t want to leave it too late,” says Rhonda Oakden, CHS, QAFP ™ Manager, Westoba Financial Solutions Ltd. “In the event of a health crisis, it forces reactive decisions that could have a negative impact over the short or long-term.
Starting these conversations early means everyone has a voice at the table and will help ensure the success of your business.” Each farm is as unique as the family who runs them, and with that comes distinct challenges and opportunities.
“When you’re discussing a family farm succession plan, there may be one individual that has put a considerable amount of ‘sweat equity’ into helping that older generation keep the farm going,” explains Rhonda. “Your advisor can help you develop a succession plan that is both equitable and fair for everybody involved.”
A well-planned out approach with neutral and experienced advisors is your first step. Reach out to your Business Account Advisor or Financial Advisor and be upfront with any plans you are already considering.
“It’s important to have discussions with the entire family and hear the wants and needs from all perspectives.”
–Megan Daly, Assistant Manager of Westoba Business Banking
“Westoba has a long relationship with some of our ag members and we have a personal connection to them; we are invested in helping them develop a plan to keep their business going,” says Megan.
The succession process can become complex if trying to work with several institutions. “Our Financial Solutions Team has access to strategic partnerships that can help with optimizing the succession plan; whether that is through insurance-based strategies that fund a buy/sell agreement, protecting against a health crisis or premature death, or equalizing the estate,” says Rhonda.
Once your plan is in place, it is important to review regularly. Changes to your current situation, such as purchasing new machinery, selling off some land, or a significant change to debt load; can all impact your overall succession plan.
Whether you are just starting out, are midway in your career, or are looking to retire in the next few years now is the time to talk to your advisor about succession planning. With the right plan, advice and trusted advisors behind you, one thing is clear: the future of your farm is bright.
Start the conversation about your farm transition. Call 1-877-WESTOBA or set up a time to talk to a Financial Advisor.