64 and getting ready to pass the torch.

[sawfly1]

Where do you start, would like to bring, next generation in , I have cut back already.quit renting. I will just supervise they can do it.
I Need a plan, have a corporation that owns a half section and the assets , rest the majority land is personally owned.
What is a good outfit to design a plan, Saskatoon, North Battleford , West Central sask. Thanks

[BTO780]

Excellent topic! Sure beats the others. Looking forward to hearing some responses.
Sorry I don’t have any answers. Lol
Have lots of ideas but would want to hear others.

[bobofthenorth]

I"m sorry but at 64 if you don't already have someone who knows the plan and is helping execute it then you might as well just call Ritchie Brothers.

[poorboy]

Actually if you are financially strong enough to retire it might be easier to get the next generation started. I came back to the farm too soon and it was very difficult to get enough money for my parents to retire and still put enough in my pocket to survive.

[crusher]

MNP is pretty deep in knowledge. It will cost though, short term pain, long term gain. They likely have an office near you. I don't use them, KRP in Edmonton is my go to. I thought I was up to speed on our succession plan, but since dad passed away, now I'm not sure. Taxes will be huge if you don't have a good plan. Sounds like you are set up well to make things go smoothly though.

[blackpowder]

With respect, it's never too late to pull our heads out of the sand.
I went to MNP.
But it starts with a harsh look at what you want. What you will need for retirement after inflation and taxes.
What your will looks like and needs to be.
I'm only 57 but realized a while ago that I want out of the day to day asap.
I want a life. Something I never had on this place. I can't/don't want to do it all anymore.
I had kids late in life and they won't be farming in my lifetime.
My long term seasonal employee can't be cash flowed year round. Neither could he manage a three legged race.
Luckily, I over time established a great working relationship with a younger fellow who wants to farm and was willing to manage my estate.
I have 10 yrs of child expenses yet, and I am afraid of inflation. A call to RB freezes my resources and opportunities.
My net worth too small to give the world the finger.
If only we knew the hour of our demise lol.
My executor also is a tremendous manager and people person. With a great job in the financial industry. He also has the farm under his fingernails which is paramount.
So in exchange for growth shares and a little co life insurance, he gains sweat equity and I can ease out without decreasing my personal income needs.
He also aims to take the operating company into a labor/machinery partnership with another farming operation.
Just be sure to cover the 3 D's when you bring someone in. Death, Debt, and Divorce.
I am truly blessed to have him.
Eventually he will own the land at a much reduced price. That which I don't spend can't be taken with me.
My goal of no longer needing my current employee can't come soon enough but is waiting for the mentioned partnership.
So, think like a CEO.
Assess needs, wants, and risks. A SWOT test as well.
Then make sure everyone on your team has expressed theirs. Goals need to be established and aligned.
An excellent first exercise is to imagine you were dead tomorrow.
Asking yourself what you "want" after a lifetime of 7 day a week plodding ahead is a profound experience in itself.
Sorry for the ramble. But the last 5 years for me have been a real growth journey. One that makes me see the 35 years before them quite differently.
Good luck and thanks for the thread.

[sawfly1]

Replying to Bob of the north. Yes I would normaly agree , but I had to skip a generation. Daughter has a good business head , i have a grandson 18, a work in progress .smart enough.i am not forcing him. And he better learn dam quick if he wants it.but i will give him the chance. I don't need a fortune anyway. What for?
Its a hell of a lot better start than I had . A quarter and 10,000 $ at 21 .in 1979 when my Parents passed.
It canbe a tough one.
But it can be done.
Been done before.

[sawfly1]

Hey thanks for the replies , any info on who you have been happy with, is a good place to start. It is mind boggling when
Your trying to make a plan.

[jazz]

Make sure you show the prospective farmers your fertilizer bill before they embark.

Forgive my ignorance but why does MNP need to be involved. Go to the bank, get the kids a loan and back them with a quarter, purchase what they can, buy the rest on time at some agreed price.

I am a firm believe of having a lot of skin in the game. It clears the mind. Equity is the goal.

[sawfly1]

Thanks for the advice jazz.
The first part is senseable
The fertilizer thing , not sure where you are going .
If wheat is 14 and canola 20 you fertilize to the max, right! at least this year when soil tests call for 20N
Am I missing something?

[flea beetle]

Stick around for another 10 years or so and keep your hands in the farm. Let the grandson manage one quarter his first year. If he enjoys it, let him do 2 the next year and so on. All the while explain the why’s and how’s of what you are doing. It allows you to slowly phase out while he gets to learn the ropes, and gain cash flow. Once he is comfortably on his feet, let him slowly start buying you out. You will have cash every year to live off of, and he won’t have a huge buyout to finance at the bank.

[tubs]

Our farm is in transition but we kept all the vultures out.Giving son a big equity stake and carry on.Farm is fairly debt free. Giving son the responsibilty for day to day operations.We are incorporated.

[shtferbrains]

Thanks for the advice jazz.
The first part is senseable
The fertilizer thing , not sure where you are going .
If wheat is 14 and canola 20 you fertilize to the max, right! at least this year when soil tests call for 20N
Am I missing something?

First thing you might find is that few 18 yr olds know what they want to do next week end.
Your going to have to be patient with him for a few years before he can grind out running a farm in these high dollar days.
Be hard for both of you as 18yr olds can't be expected to miss that part of life by working 100 hrs a week. If you expect him to do that I say good luck.


I don't see the money thing as a big deal if you have a corpration as I'm sure the advice will be to take some years to make it go.
Unless you plan on the bank lending him millions any you trust the government to spend a large part of it when you give it to them.


I never heard you say you have any other plans?

I'm doing something similar but will say generational transfers have less than 100% success rate.
Saw a 16 yr old kid make a good farm better.
But most BTO's got big because they arn't all sucessfull.
Up to you to make it work.
Good luck and look after that boy.

[blackpowder]

No, of course MNP doesn't necessarily need to be involved.
Any accountant with large real world experience in our industry and complex structures with current ongoing insight to the govt and its ever changing tax system will do.
A "good" lawyer necessary as well.
It can be hard to find those.
Your strategy will need to bridge some gulfs and be flexible to stand the test of time. Another checklist is the "what ifs". What if x happened to you or him.
Two thoughts of mine are, you cant control from the grave, and a promise is a prison with you as the jailer.
Your grandson is 18....
You are a lucky man.
This is one of those career paths that must get under the fingernails, in the blood so to speak. Imbibed. Over time.
Which you are running out of. Maybe.
My own genetics based on family history, and lifestyle choices don't bode well for octogenarian status.
As a planner I myself don't put all my chips on the "it'll never happen to me" strategy. A nice dream/goal though.

[Old Cowzilla]

Size of farm needed for new family to live is a big question and it seems a lot of farms even very big ones have multiple revenue streams. You can tell the kids what did work and what didn't work. BUT keeping an open mind to new ideas is a must in these changing times. At 62 I hope to help my son and daughter in law a few more years during the switch. Different ball game for them , not once since 1978 did I ever worry about seed, fert ,chem , fuel and parts shortages. Stressfull times indeed