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Transition planning can be complicated

An agricultural law expert says farm transition planning can be difficult and complicated.

Will McKinley with the Menn Law Firm tells Brownfield farm transition can be especially challenging for dairy farms, and he says farm families need good legal counsel, tax counsel, and financial counsel to avoid costly mistakes. 

McKinley says depending on how the farm business was set up, there might be separate transactions for animals, land, and machinery. “Sometimes though, it’s, you know, farms are set up thirty years ago in a certain way that just made sense at the time. Well, you fast-forward thirty years and next thing you know, you’re kind of inheriting a mess and we’ve just got to work with the best we can, especially with the tax situation.”

McKinley says it’s not always wise to transition the farm operation to all the members of the next generation because the farm might not be able to support everyone.  He says the transition plan can also help set children up for success off the farm, too. “You know, maybe one of the kids is kind of a crop guy or he’s the mechanic or maybe the mechanical one. We’re going to give him some money, some seed money to go and start up his own operation or maybe give him an implement or two so he can kind of go and do his own thing. He still works and helps out the farm. He’s still part of the legacy.”

McKinley says transition planning requires a lot of honest, and sometimes difficult family conversations.

McKinley spoke to Brownfield during Wisconsin Farm Technology Days.