Many options available to farming businesses to facilitate generational transfer depend on having appropriate business structures in place. While sound planning, clear communication and careful financial analysis are key success factors in generational transfer, the family’s legal business structure and how its particular advantages and disadvantages play out needs to be assessed and understood early in the transfer process to ensure the needs of each generation are met.
Key points:
- Business structures which enable financial independence between generations provide financial security for the parents in retirement while preparing the next generation with the ability to take new business opportunities.
- The business structure can be adjusted or transitioned as each generation moves into or out of the business.
