YOUNG FARMERS SHOULD MANDATE TRANSITION PLAN AND AVOID NFL


This week I am told there are 50,000+ FFA members in Indianapolis for their yearly convention.  I find it fitting to write this article about younger farmers who are the next generation and what happens when the older generation fails to put together a farm transition plan.  Without a transition plan, I believe there is a 90% chance the next generation goes to the NFL, which stands for Not Farming Long.  (yes, I coined this and take credit for it)  Before I discuss this further, let’s look at a few things.
1.      First, no one ever keeps score in farming.  What I mean is that when a son or daughter returns to the farm, no one keeps track of their hours, their input, their monetary contribution, or so forth.  As the years go by, no one is able to remember what all the young farmer contributed to the operation, especially the nonfarm siblings.  Then, at distribution time, the dreaded “fair is equal” mentality of the older generation kicks in because no one can quantify the efforts of the farming child.  
2.      The younger generation is often times entirely dependent on the older generation as to assets.   For example, if a child comes home from college and decides to work on the farm, such child won’t have two nickels to rub together.  Sadly, with the cost of land and farm assets, this may be the case for quite some time.  Meaning, even years later if the farming child is not given some special provisions to purchase the land, equipment, etc, they are likely headed to the NFL.
3.      Rarely (like once in a blue moon) do nonfarm siblings really understand what all the farming child has contributed, put up with, or done without.   Sure, when corn was 6 bucks per bushel all I heard was how rich the farming child was getting.  Now, with 3 dollar corn, I don’t hear concern from nonfarm siblings how bad the farm sibling is doing.   Farming children should consider keeping their siblings in the loop so as to keep expectations in line.  This will help in the future when it comes time for the farming child to receive or buy the farm. 
Now, what I am going to say next will be harsh.  Good, as I hope people take some of it to heart.  If you are a young farmer coming home from college, high school, or otherwise, or coming into a family operation in some manner, I would question your sanity by not having some sort of written agreement in place.   Why?  Well, let me tell you about a client who is in his 60’s who was always promised the farm by his dad.  He worked the farm for decades.  Dad died and all the other nonfarm siblings have come in and want the farm sold.  I sat and watched a man in his 60’s cry and tell me he worked on that farm his whole life, his siblings went and got good jobs and a retirement, and now he does not even have the farm to make a living off or be his retirement.   If dad would not put a succession plan in place, then the next best thing would have been if this farmer had entered into a written agreement with his dad to transition the farm.
Remember, only about 75% of farmers have a succession plan.  If you are a young farmer, and having a succession plan establish by parents or grandparents has been like pulling teeth, the next best thing is a transition agreement.   This agreement, at minimum, spells out what the expectations are of the parties and how the parties can ensure the farm transfers and continues, how we compensate for efforts, and so forth.  If you don’t have something in place, then you should be prepared to not be compensated for your efforts and the farm sold.  It really is that simple.  I’ve seen the farming child(ren) get the short end of the stick so many times in my career I have stopped counting.
In closing, John Fogerty wrote a famous song with a chorus of “Someday Never Comes”.   When it comes to estate, succession, or transition plans, people like to say they will be put in place “someday”.  However, like John sang, “Someday Never Comes”.   Young farmers need to make sure make sure “someday” does indeed come.
John J. Schwarz, II, is a lifelong farmer and has been an agricultural law attorney for 12 years. He can be reached at 260-351-4440, john@schwarzlawoffice.com, or visit him at www.farmlegacy.com.
  These articles are for general informational purposes only and do not constitute an attorney-client relationship.   




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