You have the gift of an heir or heirs who want to keep the family farm business going for another generation. What are some strategies for making that more likely to happen? Here’s what Iowa farmers Bob and Linda Lynch did to bring the fifth generation, Jay, back to farm:
- Bob and Linda required Jay to work off the farm before he came back so he had other experiences;
- Bob and Linda first hired him as an employee first to make sure it would work out;
- Bob and Linda have been steadily stepping away from the farm’s operations;
- Jay is buying his own equipment to build equity;
- Jay farms land and has purchased some land independent from his operation with Bob and Linda.
- Bob’s parents have gifted 90 acres to Bob already (they were hesitant to do this at first);
- Parents own 180 acres that will be divided equally among Bob and two non-farming sisters when they die;
- Parents have already gifted another 100 acres to Bob and his sisters;
- Bob has a buy-sell agreement in place for the land he owns with his sisters (update from article);
- Bob and Linda are beneficiaries on two life insurance policies they purchased on his parents and want to use the proceeds to buy farmland from his sisters after his parents are gone.
For more on the Lynch family transition, click here.
Teresa Opheim is Senior Fellow at Renewing the Countryside.