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According to the Small Business Association, 90 percent of the 21 million U.S. businesses are family-owned, and one-third of the Fortune 500 companies are either family-owned or family-controlled. Yet only 30 percent of family-run companies today succeed into the second generation. An even smaller 15 percent survive into the third. The reason? Lack of an orderly succession plan. Farm businesses are no different. All farm businesses and estates must be transferred at some point in time. These transfers occur both with and without an owner-developed succession plan.

With this in mind, Ohio Farm Bureau Advisory Councils recently mulled over the topic "Transfer Your Farm Business to the Next Generation." OFBF has long been an advocate of sound business and estate planning with strong policy in favor of eliminating estate taxes and ensuring adequate educational resources are available for farmers regarding financial, retirement and estate planning. But recently the issue has become even more important as the average age of Ohio’s farmers continues to creep higher. As this older generation begins to consider retirement, it is important that the resources and tools are available to help them transfer their business to the next generation.

Planning for the smooth transition of a farm business can be a difficult endeavor for families to undertake. Nobody likes to admit his or her own mortality. It is also difficult for business owners, who have spent a lifetime accumulating an estate and building a business, to think about giving up control. Yet other owners feel they are simply too busy to spend time planning for the orderly transfer of assets to the next generation. Often these families would benefit greatly if they would just take the time to develop a good plan. A good estate plan will allow all involved to reach desired economic, legal and personal objectives. Planning today pays dividends down the road, not to mention a significant reduction in family anguish and costly expenses.

Advisory Councils had a lot to say on the subject. A few members had completed a business transfer plan, others were in the process, but most had not begun to plan the transfer of their business to the next generation. We asked councils to submit advice they believe would be helpful to others who are in need of developing a farm business transfer plan. We received a lot of great information. The summary below is a good representation of what we received. Thank you to all council members who participated and submitted advice.

• Wayne County NW #8 – Read and learn on your own. Don’t make hasty decisions and make sure you have much discussion with family members.
• Trumbull County Growing Grassroots – Be open, be honest and be patient. Don’t be afraid to adjust the plan after several years.
• Preble County Council #1 – Just get the process started. Get started early since it takes a while to complete.
• Ottawa County Kuntry Folks – Make sure you have a lawyer you trust.
• Morgan County Conversationalists – If the elder generation is reluctant to start the succession, point out to the person that he/she will get to see the pleasure that the children and grandchildren will have while the person is still alive.
• Licking County #38 – Do your homework. Make it as fair as possible to everyone involved and let them know what is going on throughout the process.
• Holmes County Early Risers – Get the best legal advice. Be sure the heirs are aware of the process and understand the reasoning. It is never too soon to start the process.
• Gallia County Perfect 10 – Follow legal advice; it shouldn’t be a do-it-yourself project.
• Paulding County Flat Rock Flatlanders – Don’t wait too long, an unexpected death or someone needing nursing home care can cost the family a lot of money if plans are not in place.
• Wayne County Franklin Farmers – It’s a difficult topic of conversation but one that, when resolved, will give great peace of mind.
• Shelby County Lamplighters – Spend it all and die when you are out of money!
• Fulton County Inquirers – Deal with professionals you like and trust and feel comfortable with.

There are many excellent resources available. Talk to your local Ohio State University Extension educator for a list of local resource people, or ask for Extension bulletin "862 Transferring Your Farm Business to the Next Generation." This bulletin is also available online; go to featured links at www.ofbf.org.