Farm or Ranch Transfer Toolkit - FIC

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Farm or Ranch Transfer Toolkit

Transfer planning for a farm or ranch is a process to convey ownership or control of real estate and sometimes the entire agricultural operation. It involves transferring tangible assets like land, buildings and equipment and may also include transferring intangible assets like management skills and customer lists. This toolkit is designed for agricultural landowners. It outlines key steps to develop a successful plan and includes additional resources, including fact sheets, worksheets, and checklists to support you through each phase and prepare you to work with professional advisors.
Getting Started
  • Getting Started
  • Assess Your Financial Position
  • Identify the Right Tools for Your Transfer Situation
  • Navigate the Process
  • Negotiate and Finalize the Transfer
Sections
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1. Identify Who to Engage in the Process
2. Build Your Team
3. Identify Values and Set Goals
4. Assess Your Needs
5. Understand Your Assets
6. Tell Your Story
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Getting Started

In this section, you will:  

  • Identify the main people involved in the transfer process,  
  • Consider your values, develop a vision, and set goals  
  • Assess your needs 
  • Practice communicating your goals and needs 

Identify Who to Engage in the Process

Who has a major interest—or stake—in your transfer? Stakeholders could include family members, tenants, or another incoming producer(s) who will acquire the assets involved in the transfer. Also, list other people affected by the transfer, such as employees, vendors, neighbors or community members. Use the stakeholder worksheet to identify key people.  

Successful transfers are built on trust. To build trust, it is important to communicate honestly and consider the other person’s point of view. You can improve relationships with the other people engaged in the farm transfer by considering the other party’s point of view, communicating effectively, and building trust. Visit the Navigate the Transfer tab to learn more and practice these skills. Are there situations with any of these stakeholders where greater trust needs to be built? Consider your relationship with them, their cultural/generational/personality characteristics, and their communication style or preferences. If there are things you don’t know but would like to find out, include those, too. Use the Cultivate Trust Worksheet to think this through. 

Build Your Team

Farm or ranch transfers can be complicated, and even when they might seem simple it is a good idea to consult with professional advisors to guide you through the different parts of the process. These advisors become part of your team. They will protect your interests and help you navigate the various steps of the transfer. See the information below about the roles of various team members, then use the Build Your Team Worksheet to plan who should be part of your team. The Glossary of Business and Financial Terms can be a helpful reference when talking to advisors. Key professionals to reach out to during the farm or ranch transfer process include: 

  • A Certified Public Accountant (CPA) or otherwise qualified accountant can help you develop financial statements and track your expenses.  
  • An attorney can review your transfer documents, provide legal advice, and draft legal contracts for your specific farm or ranch transfer situation.  
  •  An appraiser can help you estimate the value of your assets, conduct agricultural assessments for tax purposes, and offer advice on local policies that affect agricultural sales.   
  • A conservation professional can help you set goals for your land and create a plan to address natural resource conditions. They often are staff at federal or state conservation agencies and support the creation and implementation of your conservation plan.   
  • A farmland protection professional can help you develop a plan to permanently protect your agricultural land from development through a conservation easement. By working with staff at a land trust or a state or local farmland protection program, landowners can use conservation easements to keep their land available for agricultural use into the future.
  • A financial advisor takes a neutral view of your operation and gives recommendations for investments, ways to cut back on expenditures, and help you anticipate future needs. They will help you plan for retirement, health care expenses, and any potential funding you may need to transfer your farm or ranch. They can also help you with cash flow analysis and tax planning.  
  • A mediator can help resolve problems and tensions in a neutral and fair way so that conflicts do not threaten the farm or ranch transfer process.

Identify Values and Set Goals

Values, priorities, and goals guide the transfer planning process.  

Your values reflect the beliefs that guide your life and actions, with friends and family, on the farm and in your community.  Your vision guides where you want to be in the future after you complete the transfer process. It’s important to ground your vision in your values. The Vision, Values and Goals Worksheet can help.  

Next establish personal and business goals for your transfer situation. Goals should be specific enough to clearly state what you want to accomplish. Then use the SMART goals framework to set useful and actionable goals. SMART goals are Specific, Measurable, Attainable, Results-focused, and Timely. 

In a farm transfer situation, it also is important to learn about the vision, values, and goals of the other party in the transfer. Usually, the needs of an incoming producer are different from those of the exiting landowner so be sure to have an open dialogue and try to find common ground.  

Assess Your Needs

After you have identified your goals, think about what is required from the transfer to meet your goals and satisfy your needs. Consider the gaps between your current situation and your goals. For example, could the transfer help ensure financial security and peace of mind, both for you and your family. Could it allow you to retain control of some of your assets through a gradual transfer process? Will it ensure that your land stays productive in the hands of another farmer or rancher?                                                                             

Also consider what needs the other party in your transfer situation has and what they might be seeking in the transfer process. What do you know about the incoming producer’s current situation, values, vision and goals? What do they need to get out of the transfer? For example, could the transfer improve their housing situation? Advance their business goals? Give thought to what their motivations might be for engaging in a transfer.  

Additionally, you will want to think about who else could be affected by your transfer situation, like family members, employees, neighbors, or community members.  When you consider the needs of all involved you can see where there is room for negotiation and compromise to ensure a successful transfer. 

Understand Your Assets

Assets are things that have value. Tangible assets are physical property like land, buildings, and equipment and financial resources like stocks, bonds and cash. These have economic value and can be reported on a balance sheet. Intangible assets are not physical and may or may not have economic value. They include things like your brand, goodwill, client lists, knowledge, and management and communication skills. They also include relationships and having close community ties. Other assets—like quality soils and access to clean water—are also important intangible assets. Farm and ranch transfers may include tangible assets, intangible assets, or both. 

As you prepare for your transfer situation consider: 

  • What tangible assets do you bring to the transfer?  
  • What intangible assets do you bring to the transfer? 
  • Do you plan to transfer your property, your operation, or both?  
  • Which of these assets do you think are most important to the other party? 

Tell Your Story

During the transfer process, you likely will need to share your vision, values and goals. Whether to a lender or a family member, telling your story can help you connect with key stakeholders. Describing the history of your farm or ranch, how you built your business, or why you placed a conservation easement on your land conveys your values and goals in a compelling way. It is also helpful to ask the incoming producer to share their story.

Who you are talking to and for how long informs what to prepare. Knowing your audience helps you to tailor your message to their specific needs, interests, and level of understanding. By understanding their background and perspective, you can choose the right language, tone, and content to best engage them and prevent misunderstandings. Key elements to include in your story include: Who you are, why you are transferring your farm or ranch, what you bring to the transfer, what you want from the transfer, and so on.

Use the Prepare to Tell Your Story resources and Letter to Supporters template to outline and practice sharing your story.

Sections
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Sections
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Identify the Right Tools for Your Transfer Situation

Sections
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Negotiate and Finalize the Transfer

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