As Thanksgiving approaches, many of us slow down, gather with loved ones, and give thanks. If you’re like us, those blessings include farmland, a tremendous asset that connects your family through the generations.
The holidays are a time for reflection, not business. Still, it’s wise to begin thinking about farm succession planning. As you look ahead to 2027, here are five tips to help your family get started.
1. Start the Farm Succession Conversation Early
Some families avoid talking about succession planning. But waiting until a crisis hits makes decisions much harder. A prime time to start is when your adult children are marrying and having children.
“It’s wise to start these conversations by your mid-50s,” says Brent Larson, a farm manager, appraiser, and Realtor with Sunderman Farm Management. “No matter when you begin, though, our team can provide the information your family needs for clear, transparent communication.”
2. Understand “Fair Versus Equal” in Farm Inheritance
What happens when some children want to farm and others don’t? What about the heir who has already been working on the farm? Start by clarifying “fair versus equal.”
EQUAL VS. FAIR: WHAT’S THE DIFFERENCE?
- Equal means dividing all assets identically among every heir.
- Fair (equitable) means distributing assets based on individual contributions, sweat equity, and the practical realities of keeping the farm operational.
Consider various options, Larson says. If there are eight heirs for an 80-acre farm, for example, can one of the heirs buy the others out?
LOOK BEYOND THE LAND
Land doesn’t have to be the only asset considered in succession planning. “If some of the heirs don’t want to farm, purchasing a life insurance policy can make the division of assets more equitable,” Larson says.
3. Look at the Big Picture for Your Farmland
What if no heirs want to farm, but you want to keep the land in the family? Maybe you want to incorporate more conservation practices on your land, too. Sunderman Farm Management can help you reach your goals.
“We’ll help find the right tenant,” Larson says. “When you’re in the area, we’d love to show you your farm and introduce you to the farmer who is caring for your land.”
4. Work With a Skilled Succession Planning Team
Succession planning requires a team of professionals:
- An attorney
- A CPA or tax professional
- A financial advisor
- A banker
- An insurance agent
- An appraiser
- A farm manager
These professional advisors will help you open up critical conversations. “You want advisors who ‘speak farm’ but aren’t emotionally attached to your farm,” says Larson, who notes that the Sunderman team can help with appraisals and farm management.
Good advisors will listen to your concerns and bring up key points that need to be part of the succession planning process, he added. “We love having these conversations.”
5. Put Your Farm Succession Plan in Writing
Once you have a plan, get it in writing, so there’s no confusion or gray areas. Even if things change, you can be more nimble and adapt when you have a plan in place.
Take the First Step Toward Peace of Mind
Succession planning doesn’t have to be overwhelming, Larson notes. “Farmland is a tremendous asset. We’ll find practical solutions to help you make the most of it.”
Ready to start the conversation? Let’s Talk. We’re happy to answer your questions and help your family plan with confidence.