It is important to train the heirs. The family members that will inherit the farming operation must be qualified if the farm is to survive. Parents should not assume the management reins can transfer without any glitches because the heir has lived on the farm. The farming heir has to be schooled in all aspects of running the farm. This includes dealing with crop inputs, understanding how to best market the crop, and how to keep the books so timely management decisions can be made.
The parents should understand that mistakes will occur during the transition period. However, the heirs will learn from these mistakes.
There are two important points to this article. One is that there must be communication between all of the family members before a succession plan is developed. The second is that there is no single plan that will work for every family.
The University of Illinois Tax School and Farm Credit are holding an estate and succession planning conference, Protecting the Family Farm Legacy, in Normal, Illinois, on June 24, 2013. If you want to learn more about dealing with both farming and nonfarming heirs, selection of the best entity for a succession plan, financing your retirement, understanding estate terminology and various types of trusts, you are encouraged to attend this upcoming conference.
Details are available at: http://www.taxschool.illinois.edu//legacy