Series of Simple Decisions - eLegacyConnect.pdf

Tool: A Series of Simple Decisions

This series of 'simple decisions' is designed to help you settle on some specific goals for the farm, your family and the future. Respond Yes, No, or N/A to each item – and make note of any details and special considerations.

 

Note: Once you have initiated your list of 'simple decisions', you may save and/or print your notes. Your responses will be archived in MyConnect (upper right of any webpage, within tools tab), to access for continued note-taking and to print.

Ownership Transition

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It is important to maintain family ownership of our farm/agribusiness.
It is our intent to transfer ownership within _____ years.
We will ensure loyal employees are offered an opportunity for continued employment.
If appropriate, we will ensure loyal employees are offered an opportunity for ownership.
If divided interest with partners, we will acquire other interests if/when available.
To keep the peace and/or maximize opportunity we may divide the operation into separate units to allow for multiple owners.
To ensure continued success, ownership and management may transition separately.
The operation and the land (real estate) may be divided into separate ownership to accommodate equitable distributions.
Land (real estate) may be owned by non-farming members of the family.
The operating entity should be owned and managed only by those who are dependent of the operation.
Land (real estate) ownership may be transitioned to _______________, _______________, _______________ (names).
Ownership of the operation should be transitioned to _______________, _______________, _______________ (names).

Financial Security

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We need to sell all/a portion of our interest in the operation to provide long-term financial security.
We will retain an interest in the land to provide long-term financial security.
We have off farm investments to help reduce our dependency on farm income in retirement.
To reduce exposure to business liabilities, we will not retain ownership/decision-making authority in the operation after retirement.
We have adequate off farm investments, land leases, and/or insurance to maintain our current lifestyle in case of premature death, disability, and/or long-term care needs.
Budgeting for retirement, we need $______ income/month, adjusted for inflation, to maintain our current lifestyle.
Budgeting for retirement, we need $______ to satisfy current obligations/satisfy personal debts.
Budgeting for retirement, our current projected income from all sources is $______/month.
Budgeting for retirement, we have an income surplus of $______ to offset inflation. Or, an income shortfall of $_____.
Due to special needs we will establish a fund/trust of $______ for ______.
Our charitable intentions include a donation/endowment to _________________.
Other details and special considerations:

Leadership Development

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Each management successor is actively participating in leadership development exercises including educational, experiential, mentor/protégé and peer group components.
Management follows a communication schedule to keep the team informed, educate each generation about the others and grow the operation.
The operation follows a written business plan that is reviewed and updated annually.
The operation is supported by a well-written operating agreement [rules of incorporation or rules of membership] to guide decision-making authority.
The operation utilizes job descriptions, compensation schedules, and employment policies to guide employees and manage expectations.
To ensure success, we will select the best management candidates available, regardless of bloodline or lineage.
Management control of the operation will transition over a _____ year period starting: Mo._____Yr.______.
As we consider management control, we will work toward _________________ (name) assuming ______________ (role), and _________________ (name) assuming ______________ (role), and _________________ (name) assuming ______________ (role) in the operation.
In the transition, the current owners will continue their positions while gradually allowing the next generation to assume more responsibility and control.
In case of premature death or disability, __________ (name) will assume interim control of the operation until the next generation is ready.
All agree, the family operation is not an employer of last resort. We only hire when there is an opening and the applicants fit the requirements of the job.
The management team, at times, may include suppliers/product suppliers, strategic alliance partners, consultants and others invested in the operation’s success.

Efficient Estate Design

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Using our estate plan, we will make equitable distributions among our active and inactive heirs.
To maintain the integrity of the farm/business operation, our estate plan will not divide ownership among active and inactive heirs.
Our estate plan will include buy/sell provisions to maintain ownership in the operation with active owners only.
Our estate plan will include buy/sell provisions to maintain ownership in the land with lineal descendants only.
Our estate plan will include buy/sell provisions to specify the terms and conditions for buying/selling a partial interest in the ownership entity.
To fund the buy/sell provisions, plan for equitable distributions and/or provide financial security for the family, we will explore life insurance as an efficient option.
In case of premature death or disability, we will explore insurance options to fund a transition/training period.
If insurance is not available, we will explore other alternatives to fund contingency needs and maintain financial security.
Given our succession priorities, we will explore a variety of tools and techniques to mitigate the estate tax.
If our existing estate plan does not help us achieve our succession objectives, we will rewrite it.
Our executors are fully aware of my plans and reasonably comfortable with our family dynamics.
Our attorney, accountant, financial advisor, and other appropriate professionals support our estate plan provisions.