Succession Planning…. Start Early
I had the pleasure of speaking at the Tri-State Grain Growers Convention (WA, OR and ID) this past Friday on a panel about family farm succession where I was able to share the perspective of a CPA. The other panelists were an attorney, a financial advisor, and a family business advisor and we discussed a variety of topics including how to fairly treat on and off farm kids, techniques for keeping taxes low, buy / sell agreements, etc., however, one main theme from all panelists was the importance of starting the succession process early and the importance of communication between all involved.
The most important part of any succession plan and often the most difficult part is initiating the conversation in the first place. From there, you have to understand your own family dynamics, whether that be which kids will be involved with the farm, future son / daughter in-laws, etc. and finally develop a shared plan between all involved utilizing your trusted advisors.
Creating a good, strategic plan can be a long process that takes patience, but if you wait to long to start you could be forced into either Uncle Sam as a beneficiary in your estate, hurt feelings among family members and/or farm assets being marred in family controversy or in the hands of people you don’t desire. This is why is of the upmost importance to have the difficult conversation early and fully communicate with all involved.
Special thanks to David Enquist for this post.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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