Transition and Succession Planning

Having an estate plan is essential for determining how farm assets will be distributed upon your passing or incapacity. Penn State Extension provides owners with educational resources and advice on farm estate and farm succession planning. Information on planning for final arrangements can be accessed, as well.

Farm Estate Planning

Estate planning should be an important consideration for anyone who owns a property. A properly prepared farm estate plan can provide owners with peace of mind and ensure the estate is passed on to the chosen beneficiaries as tax-efficiently as possible.

To get started with estate planning, farm owners should establish their business and personal goals. Common goals include providing retirement income for the family, securing an income stream for dependents, and minimizing estate taxes. Knowing the estate’s value is another important step. To come up with an estimate of your net worth, list your assets and liabilities.

An estate plan is more than a will, and there are various tools used to reflect the individual’s goals on distributing their property, as well as outline plans for continuing the family farm. Tools commonly employed in farm estate planning include using tax-free gifts, titling property, setting up a trust, and purchasing life insurance.

Join the Family Farm and Business Succession Planning online course to learn more about estate planning, establishing plans that are good for both family relations and the business, and avoiding unnecessary taxes and costs. Business owners can further benefit from Penn State Extension’s Business Exit Strategy course. This course will help you make better financial and personal decisions when leaving your business, as well as learn how to begin the sale or liquidation of a business.

Farm Succession and Transition

When faced with a farm ownership change, both current and future owners should assess the business’ financial position and legal structure. As farm succession can be challenging, it is generally advised to consult a financial planner and an attorney. It’s worth noting that an Extension Educator can also provide assistance during the farm transition process by facilitating family communications, financial decision making, and technical training for new farm managers.

The United States Department of Agriculture offers an array of farm transitioning resources and programs, including guaranteed loans and land contract guarantees. The loans can be utilized to purchase farmland or new equipment, while the land contract can be used to facilitate land transitions by financially backing both the purchaser and the seller.

Comprehensive information on farm succession planning can be accessed via Penn State Extension resources, as well. Farm owners can find advice and recommendations on planning for final arrangements, including transferring property, organizing records, and documenting preferences. An in-person workshop on farm transition planning and important factors to consider is available.