Your Succession Planning Team

Indeed, you could do this all on your own.  And maybe you did when the business was handed down to you many years ago.  Times have changed.  Laws are complicated.  The dollar amounts are much bigger.  Successors are different these days.  Uncle Sam always wants his share!

Your financial security plan (i.e. retirement) may very well rest on the shoulders of your successor(s).  Is this something to leave to chance and hope you get it right?  Indeed, after getting the ball rolling and pointed in the right direction, some family businesses have done spectacularly well in completing a successful transition without too much assistance from professional advisors.  Unfortunately, this is not usually the norm.

You and your family will often need the advice of qualified professionals with specialized training and experience in key legal, financial, tax and risk management areas of expertise. Using a team approach to coordinate the advice and discussions with professional advisors can save you significant time and financial resources in the long run.  The following is a simple overview of how a farm succession advisory team can be assembled. There are many variations.  

"Individual commitment to a group effort - that is what makes a team work, a company work, a society work, a civilization work."

- Vince Lombardi

The issues and processes for developing a farm business succession plan and a personal estate plan are very complex. Tax laws are constantly changing. Planning for your financial security and developing plans that ensure a stable future can also be complicated. All while ensuring that the farm has adequate resources and scale to monetize (or fund) your retirement.  

As a business owner, it is difficult and nearly impossible to successfully manage your business and keep abreast of the legal, financial and other issues necessary to plan and implement a successful succession plan.  After all, you cannot be expected to be an expert in everything.

More importantly however is the compounding impact of bring multiple professionals together at various points during the succession planning process to ensure that your team of advisors work together to address the interdependent parts of a succession plan.  These advisors should all act as a team, rather than a group of talented individuals in specific fields of expertise. 

Without a coordinated team effort, it can be quite frustrating and counter-productive for families planning their futures to receive conflicting suggestions from their advisors when these advisors have not taken the time to coordinate their advice with the family and their other advisors. 

Time and money is often wasted going back and forth between advisors. Sometimes, families just simply give up after being discouraged by the process and fail to fully develop their plans. 

Having a neutral third party working on behalf of the “family business” and not any one individual helps to ensure that all advisors work together using the team approach.  This can greatly reduce the chances of conflicting advice.  While it usually happens innocently, it is often a result of the various advisors not fully understanding the reasoning or trade-offs associated with another advisor’s recommendations.  

Collaboration amongst advisors usually results in advice that is much more relevant and effective than as if they had worked independently of one another.