farm family walking down a dirt road in the evening

Farm succession planning: The role of your executor and how to set them up for success

Farm succession planning: The role of your executor and how to set them up for success

Synopsis
3 Minute Read

An executor plays a crucial role in ensuring the smooth transition of a farm from one generation to the next.

This article highlights the importance of sharing key information with the executor, involving them in succession planning, and keeping them updated as circumstances change.

We also explore the executor’s role in securing the operation’s continued success and providing peace of mind for all involved.

Effective planning ensures your loved ones can properly fulfill your wishes and keep your farm successful for decades to come 

When it comes to planning for farm succession, no one knows your operations better than you. This may seem like a good thing right now. But when you look into the future, it’s not a sustainable practice.

It may be time-consuming but taking a deep dive into your operations is vital when planning your future and the future of the farm business.

Whether you know exactly what you want your succession plan to look like or are unsure of how to approach the situation, safeguarding your operations, and the success of your family for years to come, means thoughtful planning.

Does your farm have an executor? If not, now is the time to get started.

What is the role of an executor in a farm succession plan?

An executor is crucial in ensuring the smooth transition of assets and management responsibilities from one generation to the next.

They are key players in administering the estate, implementing the succession plan, managing financial affairs, communicating with stakeholders, and many other responsibilities.

To fulfill this duty effectively, the executor must have access to pertinent information about the operations well before being activated to take control.

Sharing your knowledge now will give you the peace of mind you’ve set your executor up for success and will ensure they’re not left with a mess if an unexpected situation crops up.

Important information to share with an executor

Many farmers will assume their accountant or lawyer has or will have access to all the information needed to ensure their executor is prepared to act.

Realistically, they know very little when it comes to the specifics of your operations that can make all the difference to your executor.  

A good place to start is by answering — or finding the answers to — some key questions, including:

  • What assets do you currently own?
  • When did you buy your assets?
  • What did you pay for those assets?
  • If you inherited assets, when were they transferred to you and what are their value?
  • What do you think your operation is worth?
  • What is the estimated fair value today of your land and farm operations?
  • Who do your assets go to upon your death?

Answering these questions is important, but more than that, including your executor in your succession planning can be extremely valuable. By having meetings or brainstorming sessions together, you can help them understand your vision and answer any questions they may have.

Managing expectations of each other, and the goal at hand, will be vital to a smooth planning process and transition when the time comes.

The role of executor doesn’t have to be a burden for your loved one. With your help and the proper knowledge, tools, and roadmap, you can ensure your family is aware of your wishes and prepared to execute them.

Your advisor can support you in this process to help safeguard your farm’s wealth for your children and their children.

MNP’s full team of advisors specializes in holistic succession planning, focused on your family and your farm’s unique needs. Let us help you get started.

To learn more about farm succession planning and how to bring your executor to the table, contact Scott Dickson, CPA, CA.

 

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