For most Alberta family farms, the land has been passed down from one generation to another for many, many years. But, the world of farming has changed drastically in the past few decades, and you may be wondering whether you even want your children to take over the farm… or if that’s a viable financial option.
At the Mertz Team, we have helped hundreds of families to work through similar issues. Of course, there is never a simple right or wrong answer, only what works for particular people in their own specific situations.
With that in mind, here are some of the thoughts we often raise with clients who are struggling with the issue of passing the farm from one generation to the next:
Farming has never been easy, and probably never will be. It takes a special kind of person to want to run a family farm. You probably already know whether your children have that sort of desire and commitment or not.
Will the farm be taken over as a full-time business, or a part-time hobby? These are entirely separate situations, especially when it comes to things like financial planning and tax implications. For that reason, it’s important to have everyone’s opinions and wishes out in the open.
How would ownership of the farm be divided? Of course, the most “fair” solution is normally to divide the farm amongst children. Unfortunately, that’s almost always a prescription for disaster, as well, since only one of the children may be actively working the farm. Additionally, issues like divorce and survivability need to be taken into account if the farm is going to survive as a viable, income-producing business.
These are just a few of the issues that tend to come up most often, and the truth is that there often aren’t easy answers. But, by carefully thinking through the options and giving some detailed analysis, our team is almost always able to help families find the decision they were looking for all along.
Need help with succession planning for your farm? Call the Mertz Team today for good advice from a knowledgeable and trustworthy team.
By Fred Mertz Join me on Google+