64 and getting ready to pass the torch.

[blackpowder]

After re reading some posts.
It occurred to me that the view of what a farmer looks like needs to change.
Many of tomorrow's "farmers" will have an other career, life and income. Farming on paper or as a partner or employee of a larger going concern operation.

[may-be]

I have been retired from farming for four years. A year ago my son decided he’d like to try farming. I think maybe because his best friends are farming themselves now. So last summer I purchased most of the equipment for him to start this spring. I was never incorporated but MNP thought that starting a partnership would be the best way to go for us. I sure found the business end of things have changed. What used to take two days to a week to get done now seems like it takes months. We started the partnership with the lawyer last fall and when that was done we started to proceed on everything else at the beginning ofJanuary. I still haven’t got a crop insurance confirmation. I still had credit at FCC but still waiting for the name changed to the partnership. And I just got a chequebook for our new bank account last week. It wasn’t the ones we ordered and there was a mistake printed on the cheques.
Going this route for now I personally get more write offs and any big purchases has to be discussed

[blackpowder]

My restructuring it seems will take at least two years. Suits are slow.

[Richard5]

My recommendations are not to focus on a "tax strategy". Although it is very important, I think the narrow minded, head down accountants will go here and think its a succession plan.

No matter what the plan or proposal, always ask what repercussions 10-15 years down the road. I hear many friends being told to transfer land in and live on shareholder loan, my question is what really are you doing and what's the impact to someone later on.

The biggest issue for succession is that he farm needs to be profitable. If not profitable in very key measurements it is not in a position to succeed. If you don't have well prepared, accrual financial statements, you will not have a good picture to start, plus, if its an older company, it will require adjustments to evaluate the present picture.

I do work with the 3 letter ag firm mentioned here and my suggestion is having a conversation with a lady by the name of Shannon that works across central Saskatchewan but I think mostly out of the Humboldt office. Doesn't matter who does your tax as its about planning and looking at your farm today.

The next thing is if you have 2 children that want to farm and only 1 company don't ever, ever, ever let someone talk you into putting them both in the same company. That is the worse decision one could ever make.

[jazz]

Richard, you have made your opinion know about booking CGs using the company.

What is your strategy if Justin reduces or eliminates the exemption? Sure its messy splitting ownership and perhaps moving land further away from personal control, but the tax implications cannot be ignored.

For the record, we have subdivided a half section into smaller parcels which increased its value enough to book our CGs. I think we are going to do it. 75% of our land will still be held personal.

I just cant take the risk this govt wont come after us.

[STR1]

Another great resource that can assist with this is FCC, they have professionals that work full time on farm transitions and councillors that ask everybody the hard questions?

The biggest question they will ask is to make a plan and “what do you want out of life” including what type of budget it will take for that lifestyle.

It’s easy to say “I want a life”, but that means something different to everyone, and it’s only fair to everyone involved to know each other expectations.

My concern would be with 18 year old might not know exactly what they want yet and might not grasp the responsibility of basically providing grandparents a retirement income? Probably best to have your daughter involved in those discussions?

After you determine what you want and need, then see a good accounting firm and lawyer if necessary.

But the number one thing for starting the process is about your needs…….not the next generations wants!! IMO

We’ve been working on transition for 7 years and I’m 57. Son is ready to go it on his own now but will have to wait till I’m 60!!
The first few years of transition were a steep learning curve on both sides!!!

[Richard5]

Richard, you have made your opinion know about booking CGs using the company.

What is your strategy if Justin reduces or eliminates the exemption? Sure its messy splitting ownership and perhaps moving land further away from personal control, but the tax implications cannot be ignored.

For the record, we have subdivided a half section into smaller parcels which increased its value enough to book our CGs. I think we are going to do it. 75% of our land will still be held personal.

I just cant take the risk this govt wont come after us.

I think its a risk not worrying about. If one gov't takes away, the next could reinstate. JT is not the brains behind big tax policy changes, I would hope people know that.

To each their own, its not a problem to transfer a qtr or 2 but I really feel for those that have all their land in a corp would have other options if it was owned personally. With land values are high as their are in some areas, 1 million exemption is peanuts. My prediction is it goes to 1.5 soon.

[sumdumguy]

I wouldn’t push an 18 year old straight into a full time farming career.
Would at least encourage him to get a skilled trade training (welding or electrical, etc) or a useful degree, and get 10 years minimum real world working experience before farming full time. Too many reasons to list.

Education First for sure.

[sawfly1]

He is getting hrs. To apprentice hd mechanics. And I know he needs to do something else. With my down size . It is not that big a task , to seed 1800 acres, esp with equipment bins etc. that used to do 2800.3400 at one time.
That was part if the plan ,to have enough time to teach him.
No he is not getting the land , his mom is . His mind is 80% women and cars,motor cycles, and 20 % farming.
Done high school this spring.
I have several regular talented part time workers that I can call in if need be. I know it will take some years, and hopefully he gets the farming bug.
If they can do 1800 acres well ,
That is a good start

It was a tough call walking away From 1,000 rented, but climbing in and out semis wears thin when your hips hurt.
Even a great crop 2 years ago was not fun anymore.

[Stormin]

Farm succession planning is usually very involved. In Manitoba there used to be Farm Planning Specialists from Manitoba Agriculture who would meet with a farm family and assist them. Perhaps Saskatchewan has something similar. Otherwise, MNP has seminars on the topic. I know I've been to a couple over the years. That helps with getting an idea what you want to do, and how to do it. Once you've got a general idea of what you want to do, then a good accountant can help with it, and at some point you'll likely need a decent lawyer as well.

It is great that you're starting to make decisions at 64, as it isn't something that you want to rush into, and it often takes a lot of time.

I am ready to transition my farm business to a new owner and have been advertising the business in various places including the Producer, but am getting almost no response. Any idea where the best place to market a reasonably priced turn key operation that is within range of a younger person.
The reason I want to sell as an intact business is for tax consequences, apparently better for capital gains over auction sale.