Hand over the reins
Finally, resist the urge to run the operation forever. At some point in time, the next generation needs to be in charge.
Many non-farm business operations set a mandatory retirement age for executives. This allows the business to assimilate new management and provides an exit strategy for senior management. Yes, owners do have the right to manage their assets, but they also need to think about the future of the business. By being proactive and taking the necessary steps, the older generation can help the next generation succeed, which will keep the farm running for many years to come. A target date for retirement also allows mom and dad the opportunity to plan their retirement and gives the next generation a timetable to establish its future.
Remember, less than 10 percent of family-business operations survive their first generation creators. If you want to provide a successful operation for future generations, take the time to establish a succession plan for your family business.
Darrell L. Dunteman is a partner in Bonnett and Dunteman, Certified Public Accountants and Consultants in Bushnell, Ill. Dunteman also edits the Farm and Ranch Tax Letter, a monthly agricultural tax publication. Contact Dunteman at: email@example.com.