Navigating Farm Succession

Navigating Farm Succession: Ensuring a Legacy That Lasts 

Farm succession planning is one of the most critical yet challenging processes for farm families. Ensuring that the farm remains operational and within the family while treating all heirs fairly requires careful planning, transparent communication, and strategic financial decisions. This is something I’ve come to understand on a very personal level. When my dad passed, even though he had a few precious days in the hospital to adjust some documents and meet with our leadership team, it still wasn’t enough to accomplish all he hoped for. He simply ran out of time — and it drove home how important it is not to wait. That experience has fueled my passion for helping others act before it’s too late and has prompted our agency to trying to guide others on what to do and how to begin 

The Role of Sweat Equity in Farm Succession 

One major issue in farm succession is valuing the contributions of heirs who have worked on the farm. Those who have spent years building the farm’s success—often referred to as the “operating heirs”—bring significant sweat equity. But how do you fairly divide the estate when some heirs have actively contributed to the farm’s growth while others have not?  

One strategy that can help balance these disparities is gifting. Gifting can serve as a tax-efficient way to gradually transition ownership to an operating heir while ensuring non-operating heirs receive fair compensation. By transferring ownership in increments, gifting can help the farm remain intact without creating an undue financial burden. 

Fair Isn’t Always Equal 

Our founder, Paul, often used the saying, “what’s fair isn’t equal and what’s equal isn’t fair” when he talked about legacy planning. Many farm owners struggle with this reality when dividing their estate. The goal should be to ensure the farm remains viable while also respecting the needs of all heirs. This might mean: 

- Ensuring the operating heir or heirs have the resources to continue the farm’s success 

- Providing non-operating heirs with other assets, such as life insurance proceeds, rental income, or off-farm investments 

- Structuring ownership agreements that allow for shared benefits while preserving farm operations 

Defining a Strong Farm Transition Plan 

- A well-structured farm transition plan starts with clear goals. Both the current farm owners (the senior generation) and the next generation should consider the following: 

- Where is the farm now? Assess financial stability, operational risks, and ownership structures. 

- Where should the farm be in 5, 10, or 20 years? Define clear succession goals. 

- Who will take over? Whether it’s family members, long-time employees, or a mix, knowing who will lead is crucial. 

- How will assets be transferred? Legal structures such as wills, trusts, and buy-sell agreements must be in place to ensure a smooth transition. 

The Importance of Communication 

One of the hardest parts of succession planning isn’t the paperwork — it’s the conversations. Sitting down to have honest, sometimes uncomfortable discussions with family about roles, expectations, and the future can feel overwhelming. But from my own experience, I can tell you: the conversations you avoid today are often the ones you’ll wish you’d had when it’s too late. My dad and I had many meaningful talks about the future of the business, but in the end, there were still unanswered questions and decisions left unfinished. In his final days, we found ourselves gathered around his hospital bed, having conversations we should have had long before — when there was time, clarity, and less emotion. Clear, open communication isn’t just helpful — it’s one of the greatest gifts you can give your family and your legacy. It brings peace when emotions are high and decisions are urgent. That’s why we’re passionate about helping others start these conversations now, before urgency replaces intention. 

So, where do you begin? Regular, intentional family meetings — not just in times of crisis — are key to building understanding and setting clear expectations. Some of the most important topics to discuss include: 

- Roles and responsibilities: Who will take on what role when the time comes? Are there different roles within the family versus within the operation that need discussed? Does everyone understand those expectations? 

- Sweat equity: How will contributions of time and labor by family members be valued compared to financial investments? 

- Ownership structure: What will future ownership look like, and how will it be transferred or shared? 

- Fairness vs. equality: How can you balance treating all heirs fairly while making decisions that keep the farm operational and sustainable? 

- Legal documents: Are wills, trusts, operating agreements, and powers of attorney in place and up to date? Make sure the family understand who has this paperwork and who will be in charge if powers of attorneys are needed. 

- Financial arrangements and tax strategies: How will you structure transfers and inheritance in a way that’s financially sound and tax-efficient for the next generation? 

- Contingency plans: What happens if illness, death, or other unexpected changes occur before the plan is fully in place? 

Without these discussions, farm succession can become an emotional and logistical nightmare. It’s far better to address difficult topics early rather than leaving others to interpret legal documents after an owner’s passing. 

Planning for the Unexpected 

Many families delay succession planning, assuming they have plenty of time. Unfortunately, unexpected events, such as illness or accidents, can leave a farm’s future uncertain. To avoid this, farm owners should: 

- Establish succession plans early 

- Regularly review and update plans 

- Work with trusted advisors such as attorneys, financial planners, and insurance professionals 

Building a strong advisory team—often referred to as a Board of Advisors—is essential. This team should include professionals who understand both agriculture and the succession planning mentality, ensuring that the transition strategy aligns with the farm’s long-term success. 

Ensuring a Smooth Leadership Transition 

Farm owners should also invest in preparing the next generation for leadership. This could involve: 

- Hands-on experience managing different aspects of the farm 

- Leadership and business training 

- Gradual transitions of responsibility  

- Involvement in big decisions today, so they’re ready to make them on their own when the time comes. 

Farms that successfully transition from generation to generation do so because they have prepared for it. Every operator must ensure that their successors are fully capable of running the business without them. 

Where to Find Help 

Farm succession planning is complex, but resources are available to help families navigate the process. Some key resources include: 

- Ohio State University Extension’s Farm Office (farmoffice.osu.edu) 

- Nationwide’s Land As Your Legacy Program (www.nationwide.com/financial-professionals/topics/business-growth-protection-transfer/land-as-your-legacy/) 

- Local extension offices and agricultural advisors 

Succession planning is not just about protecting financial assets — it’s about securing the future of family farms and ensuring their continued success. Since losing my dad, I’ve seen firsthand how even the best intentions and last-minute efforts can fall short when time runs out. We were fortunate to have a few days in the hospital where he was able to make changes to his legal documents and meet with our business leadership team. But even that wasn’t enough to accomplish everything he wanted to do. Many people don’t even have those few days. That’s why I’m so passionate about encouraging others not to wait. 

The key takeaway? Start planning today so your farm’s legacy can endure for generations to come. In the end, succession planning isn’t just a task to check off — it’s a critical responsibility that safeguards the legacy, stability, and future of what you’ve worked so hard to build. Tomorrow isn’t promised, and delaying these conversations could mean losing the opportunity to protect your business and your family’s future. Taking action today is the first step toward peace of mind. So, ask yourself — what do you have to lose, except everything? 

 We have two videos for you to reference as you work through this process. One that takes a broader brush approach to succession and estate planning for the farm. The second is how to get started on your own plan. Let us know how we can help you!

 Video 1: Securing your Farm's Future - Succession and Estate Planning

Video 2: Legacy Planning - Where to Start