Transferring Your Farm Business to the Next Generation

Bulletin 862

A Note From the Authors

We each have considerable experience in working with farm families who are struggling to get farm businesses transferred to the next generation. We have noticed how often the same questions keep appearing. We decided to pool our experiences and write a bulletin just for farm families planning to or in the midst of transferring a farm business. We address five key questions around which many other more detailed questions arise:

1. Do we have an economically viable business to transfer?

2. Are there enough income and assets to provide for the older generation's retirement needs?

3. How can we happily work together to help make the transfer a success?

4. What should be transferred to the next generation and when should it be transferred?

5. How do we avoid paying unnecessary income, gift and estate tax?

Each of the five parts of the bulletin addresses one of these questions. Start reading anywhere in the bulletin, but recognize that all five questions are important to a successful transfer. The one of least interest at first may become the one you need the most. Failure in any one of these five areas will make it difficult, if not impossible, to transfer a successful on-going farm business to the next generation.

The bulletin is designed to be a reference used over and over. We do not expect anyone to read it cover to cover in one sitting to learn "all I need to know." We encourage you to share it with other family members and to discuss its content often and thoroughly.

Each of us has heard more than one family say, "I wish we had started working on this much sooner." We encourage you to start now! Addressing the five questions won't be easy. However, it is likely to be the most important challenge you will face in moving to the next stage of your farming career.

Jim Polson
Robert Fleming
Bernie Erven
Warren Lee