Published on Country Guide
By Tom Button, November 18th, 2024
Most succession plans have been largely framed on giving the assets to the farming children while using life insurance and/or estate-based gifts for non-farmers, but succession planning has evolved into much more now says a farm business and succession advisor.
Today there’s more opportunity than ever to write or tweak a succession plan to drive the success of your entire family. But there’s still a lot of opportunity for it to go off the rails too
It’s been like a strain of Covid that attacks the farm business. It even started about the same time as the bug, ramping up in late 2020 when farmland values really began heating up. In fact, when you looked at the FCC graphs showing the spikes in land prices across Canada over the following months, it even got to be like watching a Covid infection map, although few of us fully realized it at the time.
Wherever land prices zoomed, this new “infection” seemed sure to follow.
What were the symptoms? There were plenty, including sleepless nights, short tempers and an intense feeling of isolation. And at the heart of it all, there was real angst about succession planning.
Surely, higher net farm worths were supposed to mean you’d leave all your worries behind. Why else had you been working so hard?
Instead, they were threatening to rip our families apart.
Farms have grappled for decades with the fair-versus-equal debate. There was nothing new about that, agrees farm business and succession advisor Len Davies. It wasn’t always comfortable, but somehow, a solution got worked out to the age-old question of how do you be fair to your non-farming children while still retaining enough equity in the farm so the children who take the place over will have a chance of success.
Tom Button, Editor, Country Guide Magazine
Suddenly, there are new problems, and new questions, like tougher times for non-farm kids in the city, more and more kids thinking of coming back to the farm, and most novel of all, the spiralling value of a land base that, if the farm succeeds, may never be sold.
