3 steps to successful farm succession - Step 3: transfer of ownership

May 25, 2018 Kimberlee Davis, Senior Financial Advisor


3 steps to successful farm succession

Step 3: transfer of ownership

My parents have a large kitchen table. It’s a beautiful piece of furniture that was crafted out of 100+ year old barn wood, salvaged from our old barn. Holidays bring the family together and we all sit around this piece of history, discussing the past, the future and our hockey pools.

In a couple of months we will sit down at this table for a very specific reason -- to discuss who will help us with our farm succession plans. We’ll be choosing our team, not this time for the hockey pool, but for our team of farm succession experts.

To do this, we have to consider the fact that my parents have a variety of potential successors from children, grandchildren and a nephew. Even though my family is still working on the first two steps of farm succession, transfer of labour and transfer of control, it’s important for us to discuss this final step of transfer of ownership and to keep it in mind as we go through the other steps.

I talk to my parents about transfer of ownership now because the more time they have to transfer assets, the more and better options they will have available to them. This stage of farm succession gets pretty complex and it becomes very easy to get stuck in the process. It’s important to remember that we don’t need to be experts in farm succession to move forward, but we do need to surround ourselves with a team of advisors who have a good understanding of farm succession to help us along our journey.

So who will be on your all-star team?

Accountant: Not just any accountant, we need an accountant that understands the intricacies of farming, farm succession and taxation. Since it’s a specialized and complex field, we’ll make sure that we are using someone with the skills necessary to guide us.

Lawyer: Depending on how we decide to go forward, we may need help with estate planning, corporate structures, or even pre-nuptial agreements.

Insurance Advisor: Insurance might help us protect against unforeseen events, and it can also help my parents who are concerned about leaving an estate to non-farming children by ensuring the policy goes to them.

Financial Advisor: Transitioning from farming to retirement is a major life change. An advisor, like me, can provide advice and guidance throughout the whole process. We also build networks with all these other farm succession experts and can refer you to people we know and trust to be part of your team. My parents will need advice on how to create a lasting income once farm assets are transferred and my primary value as an advisor is to ensure their investment funds will help them achieve their short and long term goals.

Agronomist: In my last article, I talked about a family arguing over decision-making. An agronomist can act as a neutral third-party, assisting the family in making a variety of decisions. If a farm is struggling to support more than one family, it might be helpful for an agronomist to explore how a farm could be more productive.

Moderator: I like to think our family gets along really well, but the reality is farm succession discussions can be emotional. We might consider having a neutral professional facilitate a formal family meeting to discuss the plans for the farm.

So the next time you’re sitting around your family table, I encourage you to start the discussion about who you might need on your team. Whether you gift, sell or bequest your farm through your will - or a combination of the three - a team of experts will be your best shot at winning the farm succession game.

There is more at stake when choosing your farm succession team versus your family hockey pool, but with the right team in place you’ll have the best chance of everyone involved coming out on top.

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Kimberlee Davis was raised on a family farm that has seen four generations of farming in the Vauxhall, Alberta area. As a Senior Financial Advisor with ATB Securities Inc, Kimberlee works with Southern Alberta clients to develop comprehensive plans for their future including farm succession and retirement planning.


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3 steps to successful farm succession - Step 2: transfer of control
3 steps to successful farm succession - Step 2: transfer of control

The second step in ensuring your farm's continued success after your retirement is the gradual transfer of ...

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Farm Succession Guide 2018
Farm Succession Guide 2018

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