Farm Succession Research, Trends and Programs in Wisconsin Joy Kirkpatrick, Outreach Specialist UW Center for Dairy Profitability

The next 30 minutes Wisconsin stats on farmer retirement & succession Farm Succession programs in Wisconsin Farm Succession Resource Website Farm Succession Assessment Tool

Farmer Retirement & Succession Surveys Retirement Survey – % not retiring or only semi-retiring 73% not retiring or only semi-retiring Of those retiring 60% staying in the home on the farm Of those retiring 60% staying in the home on the farm 63% have not identified a successor 63% have not identified a successor Income will come from sale of assets or income from farm Income will come from sale of assets or income from farm If no identified successor – divide farm assets equally If no identified successor – divide farm assets equally

Farmer Retirement & Succession Surveys Succession Survey – 2009 Structure, ownership, labor, management (how many generations) Structure, ownership, labor, management (how many generations) Who helped with the plan Who helped with the plan How long to implement How long to implement How assets have been/will be transferred How assets have been/will be transferred Challenges Challenges Priority objectives Priority objectives Satisfaction Satisfaction

Who helped with the process? Identifying the need for a plan Family members (33%) Family members (33%) Accountant (29%) Accountant (29%) Providing information about succession plans Accountant (38%) Accountant (38%) Attorney (36%) Attorney (36%) Educational conferences/meetings (35%) Educational conferences/meetings (35%)

Who helped with the process? Helped to set succession plan objectives Attorney (32%) Attorney (32%) Accountant (30%) Accountant (30%) Family members (18%) Family members (18%) Development and writing of a succession plan Attorney (51%) Attorney (51%) Accountant (16%) Accountant (16%)

Challenges to Succession Planning

Satisfaction with the plan Chart 7. Satisfaction with Succession Plan Satisfied, 62% Neutral, 36% Dissatisfied, 2%

Transferring assets Real Estate 33% transferred at time of death 33% transferred at time of death 33% purchased 33% purchased 17% gifted 17% gifted Farm assets other than real estate 39% purchased 39% purchased 29% transferred at death 29% transferred at death 14% gifted 14% gifted

Priority Objectives of the Plan Maintain the long term viability of the farm for future generations Financial security of the older generation Farm and/or farmland remain in the family

Farm Succession Programs One-day workshops Build awareness Build awareness Call it Estate Planning and they come out of the woodwork! Call it Estate Planning and they come out of the woodwork! Three-day workshops AgVentures – build in some strategic planning exercises AgVentures – build in some strategic planning exercises Commitment, more than one generation needed at workshops Commitment, more than one generation needed at workshops

First Weekend How Big is Your House? What Do We Want? What Do We Need? What Do We Expect? What Do We Fear? Legal Issues For Farmers Tax Issues Regarding Farm Succession Ag Law 101:Farm Business Arrangements Communications 101 & 102 Finance 102 Homework Assignments Second Weekend Finance 201 Realities of Transition Planning Dealing with the 5Ds Retirement Planning Finance 202 Putting it All Together into a Cohesive Plan Returning to the Farm

Results 40 families and just over 100 people have attended a Returning to the Farm workshop Nine month follow-up evaluations Nine month follow-up evaluations 100% indicated improved skills in strategic planning for succession 79% indicated improved communication skills 71% improved their financial analysis skills and knowledge on treatment of heirs Comments

AFTER the workshops I have assessed my personal and business goals and discussed them with other family members. Strongly disagree 0% Disagree 0% Agree 67% Strongly Agree 33% I/we have analyzed the financial capacity of the farm to carry multiple families. Strongly disagree 0% Disagree 6% Agree 67% Strongly Agree 27% We have taken the first steps in developing our written succession plan, in regards to goals, issue identification, action steps, and/or time lines. Strongly disagree 0% Disagree 40% Agree 53% Strongly Agree 7% We have successfully transferred one aspect of the management of the farm to the next generation. Strongly disagree 7% Disagree 33% Agree 47% Strongly Agree 13%

Other Resources One-on-One consulting Agents/specialists teleconference Agents/specialists teleconference Farm Succession Assessment Tool Farm Succession Resource website Farm Succession Resource website

Questions, Discussion? Joy Kirkpatrick Outreach Specialist UW-Center for Dairy Profitability