A farm transition and succession plan is a continuous process that involves transferring knowledge, skills, labor, management, control and ownership from one generation to the next. Even though it involves estate planning, it goes far beyond the mere transfer of assets to your heirs and includes all aspects of the farm business from the legal and tax angles to the day-to-day management and operation of the farm business. At a minimum it involves decisions regarding asset ownership, choice of business entity, estate planning, retirement planning, tax planning, and transfer of labor and management. It is important to realize that formulating a viable transition and succession plan is not a one-time affair to be completed, encased in glass and labeled, “Open only in case of the owner’s death.” You should begin formulating your farm business transition and succession plan at least 5-10 years before your anticipated retirement. In fact, transition and succession planning is a process that should begin the day you take control of the farm business and continue throughout your life. Farm business transition and succession is a continuous and dynamic process. As you move through life your situation, family needs and business will constantly change and require you to make changes in your transition and succession plan to keep it viable and relevant.

Excerpted from: Farm transition and succession - What is involved? Craig Thomas, Michigan State University Extension