In many ways, farms are similar in how they operate to other businesses; however, when it comes to issues like succession planning and retirement, farm operation can be very different from most other types of businesses. At Leskun & Son Accounting, we know about many of the difficulties that can come into play when planning out retirement and business succession for BC farms, and we are always happy to help come up with a solid plan to help our farming clients smoothly transition into a worry-free retirement.
Why is succession planning important?
Retirement and Succession Planning for BC Farms
Planning for retirement is a pretty exciting time, but it can also be stressful without the right considerations. A good succession plan for the business side of any farm in BC should start by addressing three main topics: ownership of the actual farm assets, management and decision making for the property and business, and division of labour. There are often other elements that come into play, such as living situations, the profitability of the farm and to whom the profits will go, and financial responsibilities. If you are beginning to consider retirement and succession for your farm, some questions to ask yourself in order to begin assembling a plan include:
Who Will Inherit the Property?
This question can be straightforward in some situations and complicated in others. Many people with multiple children will divide up certain aspects of the farm amongst them, while others will assign one of their children to manage all aspects of the farm. In any case, this can be an emotional discussion and should be discussed thoroughly with everyone involved. If ownership is to remain with you but operation will be succeeded by your children, knowing how the operation will be divided up will be important.
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What Do You Want Out of Retirement?
Knowing your expectations for your retirement is crucial. Do you hope to take a completely hands-off approach to the farm after retirement? Will you be remaining on the property or moving elsewhere? It is also worth considering where the money for your retirement is going to come from, and what kind of lifestyle you intend to pursue using those funds.
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Is Your Intended Successor Ready to Take Over?
In many cases, the successor is completely prepared to run the farm but, in others, there is a fair amount of training that needs to take place before the transition can be made smoothly. Make sure you have a training plan in place and that this factors into your projected timeline for retirement.
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To find out more about business succession and retirement to ensure a smooth transition for your BC farm, or if you have questions for one of our professional accountants about any other accounting issues, please contact Leskun & Son Accounting at the location nearest to you (Abbotsford, Chilliwack, Langley, or Mission) or fill out a contact form on our website.