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When it comes to family farms, the stakes are extremely high, and the decisions you make today can shape the future for generations to come. If you’re a farmer, you might already know that there’s more to managing your farm than just planting crops and tending to livestock. One critical aspect that almost always gets overlooked is estate planning—specifically how you divide your assets among your children.
Your entire life, you’ve grown up working on the family farm, eager to take it over one day. Now, imagine you’re 20 years old, fresh out of school, and more than ready to return to the family farm. Your parents tell you that you’ll start getting responsibilities in a few years, and eventually, the farm’s assets will follow. Sounds promising, right?
Deciding how to pass down your family farm can be one of the toughest decisions you face. Many farm owners want to be fair and divide the farm equally among their children. While this seems like the right thing to do, it can sometimes lead to problems that might put your farm’s future at risk.
Every year, countless family farms face the heart-wrenching reality of closing their doors. Understanding why this happens can be the first step toward ensuring your farm doesn’t become another statistic. Here are the three critical reasons most farms fail—and what you can do about them:
Are you prepared to start tax planning? Unfortunately, 99% of the agriculture industry is not. In fact, the majority of farm operations I speak with don’t have their finances organized at all. They begin tax planning close to the deadline, which leaves them stressed, anxious, and unable to enjoy the holidays. This is what we call reactive tax planning, and it has led to the downfall of many farm operations.
Every farmer I talk to worries about their income. Some are struggling to make enough money, while others fear that a good year could end at any moment. I get it—I've been there too.
Dave Ramsey’s philosophy is clear: debt is bad, and his advice on paying it off works well for W-2 employees. But is this approach suitable for everyone, especially farmers and ranchers? I've had several customers compare me to Dave Ramsey, but I approach financial advice very differently, especially when it comes to the ag industry.
Feeling frustrated as you watch your neighbors succeed while you’re struggling? It might be time to face the tough truth: your financial practices could be the problem. Some farmers thrive because they meticulously track every dollar, while others are just hoping for the best and risking failure. If you’re not keeping a close eye on your finances, you’re making a costly mistake. Are you ready to take control and join the top 25% who manage to thrive no matter the market conditions?
In this blog, we dive into the tough decisions family farmers face when it’s time to pass down the operation to the next generation. We talk about the common issues, like dividing assets among kids, and share practical tips to keep the farm sustainable. By planning ahead and encouraging entrepreneurship within the family, you can protect your farm’s future and ensure your legacy lives on for generations.
