NPR - Problems With Farm Succession: The Case Of Saskatchewan, Canada (p164-169)
The succession planning process should start years if not decades before the transfers take place. Unfortunately most farm couples in the exiting generation have not saved enough money outside the farm business to finance their retirement. They have to rely on the farm assets to generate their retirement income either through sale and/or rental. The situation is complicated further when the exiting generation wants the farm business to pass to the next generation intact and to also be fair to all their beneficiaries. A number of tools were investigated including sale of all assets, sale of livestock and machinery and rental of land, insurance on the exiting generation with non-farming beneficiaries claiming the proceeds, and incorporation of the farm business. The only tool that does not require the exiting generation to lower their retirement income and/or the incoming generation to have substantial off farm income is incorporation.
Keywords: succession, planning, goals, rental, insurance, incorporation