Illinois residents may be interested to know that 97 percent of all farms are family owned, according to the United States Department of Agriculture. However, there are many challenges that may result when family members choose to pursue other fields, such as volatile commodity prices, tougher lending standards and increased regulation.
Succession planning is critical to the smooth operation of a family farm over many generations. Since not all family members may be interested in or capable of running the farm, it may not be wise to put just anybody in charge once the current leaders step aside. If no one in the family member is willing to run the business, an outside party should be tapped to be the new leader. Doing so may preserve family ownership of the farm while ensuring it is run properly.
A succession plan is crucial for keeping key employees working with the family. If those individuals suspect they are going to be let go, they may look for other jobs. Continuity is also important when it comes to retaining ownership of the land on which a family farms. In many cases, the land is the most valuable asset.
Creating an estate plan as soon as possible may make it possible to preserve a family business while also minimizing family disputes. By discussing who will eventually take over the company or what roles other family members will play, it may be possible to get everyone on the same page about the future. Attorneys may be able to help their clients to make changes to their estate plans if people pass away or the proposed future owners opt to pursue other career opportunities.
