Succession experts encourage producers to have a plan, communicate
Casper – Each year, the Wyoming Women’s Ag Symposium highlights the importance of succession planning and generational transfer of agriculture operations, and this year’s event focused on the importance of relationships in succession planning
A panel of succession planning experts, including Estate Planning Attorney Tassma Powers, Farm Credit Services of America Financial Officer Esther Clark, Certified Public Accountant Laura Gossman and University of Nebraska-Lincoln Agribusiness Professor Ron Hanson, addressed the top concerns of women in the planning process.
Hanson offered what he called a very easy piece of advice – take control.
“Producers must take control, make it happen and make sure their plan gets communicated,” he said. “The one piece of advice I can give is that people must talk with all of their children.”
His bottom line is that families are important, and while farms and ranches can be replaced, families cannot.
“No ranch is worth losing a family,” Hanson noted. “Things might not be the way the producer always thought, but the children getting along and continuing to be a family is important.”
Powers noted that it is vital to keep in mind that much estate planning work goes into work that isn’t legal.
“Most of the work we do isn’t legal in nature,” Powers said. “Usually, we facilitate the conversations between the family.”
Making a plan
Additionally, planning is the most important step, she continued.
“The government has a plan, even if producers don’t have one,” she explained. “It is important for the producers to communicate the plan, or the government’s plan will become their plan.”
Gossman continued the same idea, noting, “The most important thing a producer can tell me is what their goals and priorities.”
From a financial perspective, Clark said, “The most important thing from a lender standpoint is that producers make sure their lender is a trusted business partner.”
She emphasized the need to communicate with lenders to communicate their goals and priorities.
The money piece
While the financial aspect of succession planning is important, Powers said, “Don’t let the tail wag the dog.”
“Taxes aren’t something any of us like to pay,” she noted, “but at the same time, taxes are only one component of what we face when we look at a succession or estate plan.”
With estate taxes at 35 percent with a $5 million exemption, Gossman noted that a step was taken in the right direction from the previous 55 percent tax and $1 million exemption.
“This change makes a huge different in the farming and ranching community,” she said. “Those people who haven’t talked to their attorney or accountant during the last year should make an appointment because there are great opportunities out there.”
Gossman further added that there are a variety of complex strategies for estate planning, but some simpler solutions are available.
“There are a number of tools, but these tools have to be tailored to meet the goals of the family,” she noted.
Making it simple
While estate planning can be difficult, Powers said, “In my experience, there are no shortcuts.”
She continued that while some approaches may be less complex, it is important to remember that every step should be taken to ensure succession planning is done properly.
“It is important for ranch owners to talk to a professional and understand the implications of their decisions,” added Powers.
“Everything producers do and every step they make, they should talk to the lender,” Clark emphasized. “Lenders should be involved every step of the way.”
At the end of the day, the ranch continues to be a business – before and after an estate transfer, said Gossman, adding, “Run the ranch like a business.”
“The most important thing that everyone understands is that it is very important to communicate through the estate planning process,” Powers commented. “We have a lot of conversations in our office that are uncomfortable because we are talking about sensitive issues. There is a lot of vulnerability present, and we have to accept it and deal with it.”
Powers added, “It is important to communicate.”
The Wyoming Women’s Ag Symposium was held Nov. 21-22 in Casper. Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at firstname.lastname@example.org.