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Unit 3: Managing the Farm/Ranch Business for Long-Term Success

Transfer/Succession

Farm transfer to a family member is the most common form of succession among farm and ranch business owners. Most retiring farm and ranch owners dream of having their children or other family members carry on the farm business. According to USDA Agricultural Resource Management Survey data, of farmers planning to retire during 2001-2006, 88 percent already had a successor lined up and most, 80 percent, were family members. Intergenerational farm transfers have many benefits, including:

• risk sharing

• reduced transfer costs

• tax benefits

• knowledge retention

• labor/management sharing

Farm transfers take time. They can be highly emotional. And, they have significant legal and financial consequences (remember that the bulk of an owner’s wealth is wrapped up in farm-related investments). It is very important for those entering and exiting the business to develop a careful transfer plan. Again, the process will require legal expertise so point farmers and ranchers to financial advisors, lawyers, family counselors and other professionals who can address their specific needs and concerns.