Mike and Sue Martin knew about farmers who waited until they were in their 80s or even older before thinking about passing their farms to the next generation.
“We heard all the stories about when people didn’t make their succession plans ahead of time, and then things blew up,” Mike says.
So when the Martins’ son, Ben, expressed interest in taking over the family farm after their retirement, they knew they needed to start planning right away. The Martins own two mid-size dairy farms in Elkhart County. When Sue heard about the Purdue Extension Succession Planning Team’s workshops, she and Mike began to attend.
“The only workshop we’ve ever missed was the one that was canceled,” Sue says.
The Succession Planning Team is a group of lawyers, accountants and Purdue Extension educators who offer workshops and family consultations across Indiana to help families transfer farm and business ownership. The workshops cover various aspects of the succession process, including financial skills, risk management, asset transfer, business structures, communication, and team-building.
Attending the workshops alerted Mike and Sue to the magnitude of the succession planning process, and what obstacles lay between their plans and their goals. Their goal is to make the farm sustainable to preserve the land for future generations, as well as to make it profitable enough to support their son’s family and their own retirement.
“Farming is a complex thing,” Sue says. “The biggest thing I learned through the workshops is what we need to be thinking about and what we need to plan. We wouldn’t even know to think about some of these things if we hadn’t gone to the workshops.”
Both Mike and Sue stressed that transferring farm ownership to a family member or other younger farmer is a long-term process that involves hard work, from finding the right professionals to help with the transition, to simply finding time to work on the plan. They met with members of the Succession Planning Team to connect with financial counselors and lawyers who could help, but this was just the first step.
“One of the challenges is that we’re still very involved in the labor force on our dairy farm, so finding time to work on the plan is not always easy,” Mike says.
The couple encourages other farmers who are starting to think about retirement to begin planning early. Attending the Succession Planning Team’s workshops allowed them to network with other farmers who were going through the process and pick up information and tips, Mike says.
The Martins say their desire to care for the earth and preserve the farm for future generations keeps them going. “Erosion is a really big deal,” says Sue, “and we’d like to see the farm still being here and being productive into the future.”
More than half Indiana’s small and medium farmers intend to transfer ownership and management to their families. But many have not initiated plans and more than 80% lack such plans in writing. The Succession Planning Team aims to address this issue.
More Indiana farmers are learning how to start succession planning, what professionals to contact (including attorneys or accountants), the options for asset and management transfer, and the tools for risk management and financial feasibility.
40,000+: Indiana farms on 200 acres or less
54%: Owners of such farms planning to transfer ownership within the family
<20%: Owners of such farms who have written succession plans
100%: Event attendees who found the information useful
We will continue to prepare farmers for the strategic, financial, and emotional decisions required in succession planning. The Purdue Initiative for Family Firms will bring this information to family-owned businesses outside of agriculture.