For many farm families, succession planning is a conversation that never seems to make it to the top of the list. Everyone agrees it needs to happen. Everyone intends to get to it. Then another year goes by.
Mike Downey, succession planning manager with Uncommon Farms, sees this pattern all the time. He works with families who want to keep the farm together, but struggle to move from talking about the future to making decisions about it.
“You cannot afford to delay action any further,” Downey said during a recent succession planning webinar. “Information itself does not equal progress or action either.”
Downey and Uncommon Farms CEO Matt Ronken spent the webinar discussing why so many farm transitions stall, what successful multi-generational farms tend to have in common and how families can begin turning good intentions into a workable plan.
“Farmers often get 30, 40, even 50 chances to plant a crop and improve each year,” Ronken says. “But when it comes to estate and succession planning, there’s usually only one chance to get it right, and most families haven’t had much practice at it.”
“Harder Than It’s Ever Been — and the Easiest It Will Ever Be”
Succession planning doesn’t happen separately from the rest of the business. It gets squeezed in between everything else it takes to keep a farm moving.
That’s why Ronken believes conversations about the future of the farm can’t wait.
“Operating a farm is more difficult than it’s ever been, and I’d also say it’s the easiest it will ever be,” he said. “It’s not going to get easier. It’s going to get more difficult. There will be more disruption, but disruption also brings opportunity.”
These pressures often make succession planning feel like something that can wait until next year. But for many farms, decisions about ownership, leadership, and management will shape the future of the operation more than any market cycle.
“We know running a farm is complex, and it can feel isolating,” Ronken says. “That’s true not just emotionally, but physically, mentally, and emotionally as well.”
For families hoping to see the farm continue into the next generation, succession planning is more than an estate discussion. It’s part of the farm’s long-term business strategy.
What Multi-Generation Farms Have in Common
Downey says only a small percentage of farms make it to the fourth generation, and he’s looked closely at what sets these successful farm families apart.
First, they make time to work on the business.
“When I was growing up, my grandpa measured success by how many hours you worked in a day,” Downey says. “Today, with all the risks and everything involved in running a farm, I don’t think we can afford to do that anymore.”
Successful farms set aside time to discuss goals, leadership, ownership and the future direction of the business.
Second, they don’t confuse tax planning with succession planning.
Many farms have LLCs, corporations or trusts that were established years ago to address tax concerns. But Downey says those structures often have little connection to the family’s long-term goals.
“Families I’ve worked with have realized that the corporation they put together in the early 1980s was mostly for tax reasons, with not much thought given to how the farm would transition in the future,” he says. This becomes an issue when the legal structure on paper doesn’t match how the family actually wants ownership, control, and management to shift to the next generation.
Third, they identify and develop successors before a transition becomes urgent.
Downey recalls one of his first succession planning cases involving a 70-year-old farmer and his 92-year-old father who were still farming together in a 50-50 partnership.
Meanwhile, the next generation was waiting for an opportunity to step into leadership.
Finally, successful transitions require honest conversations about what is fair.
Equal isn’t always fair if it leaves the farming heir with debt payments the operation can’t support. Every family eventually has to wrestle with that reality.
“The more and more I do this, having the crucial and necessary conversations is probably more important than having the perfect estate plan [or] having the perfect business structure in place,” Downey says.
The documents matter. But clarity, communication and shared expectations matter more.
Defining Success Before Building a Plan
Before families start updating legal documents or creating new business entities, Downey encourages them to answer a more fundamental question:
What does a successful transition actually look like?
For one family Downey worked with, success meant still enjoying holidays together years after the transition was complete. It meant the older generation having the freedom to step away, the next generation feeling confident making decisions and all heirs understanding how and why assets were divided.
For Downey, a fifth-generation farmer himself, success is even longer term.
“I would love to see my kids there, celebrating the 200-year award here in Iowa,” he says.
Once families have a clear vision of what they’re working toward, decisions about ownership, buyouts and leadership become easier to evaluate.
Five Steps to Start Succession in the Next 90 Days
For farm families ready to start making progress, here are five ways to get the conversation moving in the next 90 days.
Within 30 days
Start by getting on the same page about where things stand today and where the farm is headed.
- Have one specific conversation between spouses or with on-farm children about your long-term vision for the operation
- Talk through what you each see as the future of the farm, including roles, expectations and what staying on the farm might look like
- Map your land base and circle the 10-mile radius around home, where most of your opportunities, decisions and relationships are rooted
Within 60 days
Begin putting structure around goals and expectations for both the farm and the people involved.
- Write down your top 5 to 7 goals for the farm’s future, first individually, then compare notes as a family or management team
- Identify children or potential successors and talk through expectations such as education, off-farm experience, timelines and interest in management roles
- Start outlining what each person wants long term, including those who may not return to the farm
Within 90 days
Bring in outside perspective and start connecting goals to your current structure.
- Sit down with a trusted advisor such as a lender, accountant or succession planner to review your current structure and documents against your goals
- Look at where your current setup supports your goals and where it creates gaps or limits options
- Decide which issues can wait and which need a plan before the next planting or harvest season
“Focus on progress over perfection,” Downey says. “If we’re going to try to handle all of this at one sitting and perfect it, it paralyzes people.”
Start Somewhere and Keep Moving Forward
Downey says you don’t have to finish your entire succession plan this year — but you can’t afford to keep doing nothing.
“Those farms that are part of that 5% to make it to four generations, they’re rolling up their sleeves and they’re figuring this out,” he says.
The farms that tend to succeed don’t treat succession as a one-time document to complete and file away. They treat it as a process, working through decisions over time so ownership, management and expectations line up when the next generation steps in.
