Organizing Farm Transition Requires a Team Effort, By Jason Ertl, UMN Extension Educator – Ag Production Systems in Nocollet & Sibley Counties


Farming in the Midwest has long been considered a family affair.  The farm families of the past who homesteaded the land faced many challenges, but managed to tame the terrain to uncover a fertile landscape suitable for future success and prosperity in crop and livestock production.  Fast forward to today’s farmers, who face a different set of challenges, but share the same mentality of instilling a passion for agriculture and building up a business viable to pass down to future generations.

According to the USDA’s most recent Census of Agriculture, the average age of a farmer in the United States is 58.3 years old.  As the average age of farmers reaches closer and closer to retirement, more and more families are going to need to think about the future of their operation and the businesses they’ve built.  With the hectic holiday season behind us and a few more months until the spring thaw, now might be an ideal time for those on the homestretch toward retirement to start having those conversations and think about the many different considerations that need to be made.

There are a number of different steps that need to be taken in the farm transition process, all of which are equally important and shouldn’t be taken lightly.  The first step, and perhaps the main question to ask before getting started, is whether or not you are financially and emotionally prepared to transfer the business.  Building up a farm business takes decades, lifetimes even, and farmers need to ask themselves if they are truly ready and willing to entrust their life’s work, leadership responsibilities and control over future business decisions with someone else.  Financial position, retirement income or Social Security status to ensure a comfortable living during the post-farming period should also be considered.  Often times these transitions are between families, with the farms being passed between parents and children.  The entering generation needs to be in a position where they are not only able to make necessary farm payments, but also have the technical skill and passion to take on a life of farming.

Just like in every other business setting, effective communication is essential for the success for a farm transition.  Even the best laid plans, with sound legal arrangements and cash flows, can go south without open, honest and direct dialogue between the parties.  Before parties meet to discuss anything regarding the planning or logistics of the transfer, they should individually put together a list of goals, both short term and long term, which outline their ideal path for how the transfer proceeds.  These goals, whether they are business, family/personal or retirement, need to be detailed and include specific action steps, outcomes and impacts.

Farm transfer discussions can be an emotional time for parties involved, and it is recommended that meetings are held not at home around the dinner table or over the holidays, but rather at neutral locations free from distractions.  One important part of facilitating productive transfer meetings would be taking detailed notes and putting everything discussed into writing.  Farm transfers are a long, lengthy process taking months, more often years, to complete.  Having detailed accounts of the topics discussed, agreements made and ongoing conversations to follow up on will ensure everyone is treated accurately and fairly.

Putting together a team of trusted advisors and professionals is another key element in a successful farm transfer.  The main individual on this transition team would be the legal representation, as they will be the primary director for legal and financial decisions. It should be noted that not all attorneys or legal professionals are experienced in agriculture or estate planning, so providing specific details about your farm business and expectations should be done before retaining any legal services.

Families that have previously gone through the farm transition process or local agribusinesses can serve as references for firms or attorneys to work with. Searching the Minnesota Bar Association at or the Wealth Counsel at can also assist in identifying legal professionals throughout the state who can handle transitions and transfers. Beyond the current and future owner of the farm business, individuals who can also be included in a transfer planning team may be spouses, in-laws, insurance agents, farm consultants or those who have gone through a farm transfer in the past.

There are a number of business structures that families can enter as they transition from one generation to the other. Some families elect to farm together in the beginning on a trial basis, where children are employed by the parents for a certain period of time. Another example would be for the two parties’ farm together but remain separate entities. This provides a young farmer with training and opportunities to make management decisions, build relationships with lenders, and make marketing decisions. There are many different ways that farm businesses can be structured and organized, including partnerships, limited partnerships (LP), a Limited Liability Company (LLC), or an S or C Corporation. Meeting with your legal advisors and accounting professionals can help you figure out which business entity is ideal for your situation.

Farmers in Minnesota have access to a number of different resources to help them get started and navigate the transfer process, including workshops and retreats at various locations throughout the state in early 2019. During the period of January until March, experts from University of Minnesota Extension and MN State Colleges and Universities are partnering up to put on a program titled “Farm Transition and Estate Planning: Create Your Farm Legacy”. This program, funded with support from the MN Dept of Ag., will help farm families to develop the necessary plans for their estate and farm transition. Attendees will have the opportunity to set goals, establish a transition and estate planning team, understand transition strategies, business structure, and tax implications. Details about dates, location and registration can be found by visiting the University of Minnesota Extension Transfer and Estate Planning webpage at

It’s very easy to avoid the tough questions like “When do you think you’ll retire?”, but it is never too late to start thinking about the future of your farm business, especially if you and your family envision the farm being passed down to the next generation. No matter what you do, there are going to be difficult decisions that need to be made. By assembling a knowledgeable and trusted team, setting realistic goals, and taking advantage of the many resources available to producers, you can reduce the amount of stress and set yourself up for success when the time comes to hand over the reins.

Jason Ertl, UM Extension Educator- Ag Production Systems, in Nicollet & Sibley Counties. Jason can be reached at


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