Estate Planning Brings Tough Questions To Light

Transitioning a farm is not for feint-hearted, but a necessary task.

Published on: Mar 18, 2013

The toughest questions that come up about farming are not about which crops to plant. They are not about which varieties to choose or when to put a fertilization plan into action. No, says Ronald Hanson, agribusiness professor at the University of Nebraska-Lincoln, the toughest farming issues surround transitioning the farm to the next generation. Still, determining who is going to own and farm the land after the current owner passes away is an important consideration for every family that must be faced head on.

Hanson spoke at the 24th Annual Joint Commodities Conference, Jan. 17, in Durham, N.C., sponsored cooperatively by the Corn Growers Association of North Carolina, N.C. Cotton Producers Association, N.C. Small Grain Growers Association and the N.C. Soybean Producers Association. Hanson told attendees every farm owner needs to ask himself or herself if there is a succession plan in place.

Estate Planning Brings Tough Questions To Light
Estate Planning Brings Tough Questions To Light

"I'm not talking about a will that says who gets what or how things are divided, but an actual succession plan," he said. "In other words, when something (unexpected, like a death) happens in that family will everyone know what happens next? How many of you folks have protected that family legacy? How many have always made certain that farm dream will always continue for that next generation?"

According to U.S. Department of Agriculture statistics, the average age of farmers in the U.S. is now 57 years old, so these concerns are directly confronting most landowners. But these questions should concern us all. After all, no one knows when the inevitable will happen – and death is inevitable for us all. These kinds of issues require a great deal of consideration and planning. Often they require a great deal of time, in order to work through all the details.

These issues and how they are handled, Hanson says, will determine who ends up owning the family farm. Not only that, but they will also play an important role in family harmony and in determining whether there is a sense of fairness or unfairness among remaining family members.

There are some formidable obstacles standing in the way of action that often prevent a family from putting a succession plan into action. Some of these are:

• Admitting that someday the head of household/farm owner will die.
• Issues are just too emotional to discuss.
• Concerns by the current head of the farm that he/she may have to give up farming (after enacting a succession plan).
• A sense the person in charge may no longer being in control.
• A concern by the head of the household that some children may get upset and angry.

It is critical that owners face up to these kinds of concerns, Hanson said.

"No one likes talking about death but it will happen," he said, "so why not be prepared?"