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A Holistic Approach to Farm/Ranch Transfer Planning BY ANN ADAMS
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hile farm and ranch transfer planning has always been an important part of planning for an agricultural business, the need for effective farm/ranch transfer planning is greater than ever with the average age of farmers and ranchers increasing worldwide resulting in many more acres/hectares of farm and ranch land changing ownership in the coming years. With so much land in transition and the additional threat of development, the pressure on families to sell to the highest bidder is great. The potential loss of agricultural land to development or corporate interests means that there is an even greater need to support agricultural families in thoughtful transfer planning to keep these working lands in production by local owner-operators and to keep these rural communities strong and productive. It was with these challenges in mind that HMI took on the task of creating a Farm/Ranch Transfer Planning learning module and manual with the help of the Thornburg Foundation and a
In Practice a publication of Holistic Management International
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team of Certified Educators who had experience using the Holistic Management® Framework as a tool to help step people through the various components of a Farm/Ranch Transfer. We also collected stories from our network of how they had used Holistic Management to help them through the process. The result is Leaving a Lasting Legacy: A Holistic Approach to Farm/Ranch Transfer Planning which is available on HMI’s store at: https://holisticmanagement.org/product/aholistic-approach-to-farm-ranch-transferplanning-manual/. As we reviewed the various transfer planning processes and tools, we noted that the key components for a successful and sustainable farm/ranch transfer all started with discussing in general terms the importance of goalsetting and gaining clarity about individual and business vision. Obviously, the holistic goalsetting was a helpful process for naming those values and creating common ground and vision which helped these business owners then with their planning for the other key components that make up a transfer plan: • Business Plan • Land Plan • Estate Plan • Retirement Plan • Management Transfer Plan
Farm/Ranch Transfer Planning INSIDE THIS ISSUE Read about the Ranney Family and their journey to complete their ranch transfer plan on page 5.
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• Asset Transfer Plan Articulated within each of these plans, which had been given context by the family’s holistic goal, were the answers to key questions that I believe each member of a family involved in management and asset transfers should consider: • What are your values? Using the family’s holistic goal can help identify common ground for multiple generations. • What is your legacy you want to leave? Using the vision statement in the family’s holistic goal provides guidance for this question. • What is enough? Should transfer planning be about getting the most money or the most value for the family’s desired outcome? • What is equitable? Equal is not the same as equitable. Equitable helps us return to the values of each asset and what is the most appropriate transfer to preserve the values of the whole. • Which assets and which management should be transferred to whom? You can transfer management to one person and assets to another. What are the values that can be supported through appropriate structure of management and asset transfer? • Is keeping working lands working a key value? It may be easier to sell the assets that may lead to your working land not being used for agriculture in the future. How important is maximum money and ease of asset transfer to you? How important is keeping the land in agricultural production important to you? There is nothing like learning from other people’s experiences. We selected some of the stories from your network that highlights the structures and tools used by the older generation to make sure that they could transfer the management and assets to the younger generation while creating the legacy they wanted to pass on through shared CONTINUED ON PAGE 18