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monica.greenlee@lpl.com
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Farmers

Cultivate & Elevate

We strive to simplify the financial lives of farmers, the backbone of our country,   and provide them with the freedom to focus on their passions and family.  

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Why Farmers Need A Financial Planner

Farmers and agribusiness owners encounter unique financial management opportunities and challenges. For many farmers, the concept of "wealth" goes beyond financial terms; it's about the fulfillment derived from working the land, raising a family to carry on the legacy, preserving family values, and maintaining their independence as business owners. 

Many farmers do not have financial planners because most planners are unfamiliar with the unique challenges of managing farming assets, which differ significantly from traditional investments. Furthermore, farming households often have distinct savings and loan circumstances compared to typical U.S. households, leading to a different financial path. At HSB Financial Planning, we tackle this by forming a collaborative team that includes the client’s attorney, CPA, and financial planner.

This team works together to understand the client’s goals and creates a comprehensive financial plan, covering cash flow, tax, retirement, estate planning, risk management, and philanthropy.

Here are some ways a financial plan could be advantageous for farmers:

  • Assess self-employment earnings to determine if Social Security benefits might be a worthwhile "investment."
  • Develop a plan to generate retirement income from the farming operation.
  • Implement tax diversification strategies for savings and income.
  • Assist the next generation in managing and owning the business.
  • Create a comprehensive estate plan strategy that encourages family harmony and continuation of business.
  • Prepare for potential scenarios such as long-term care, disability, or premature death.
  • Identify strategies to manage taxes on the sale of land, equipment, grain, or other agricultural assets.
  • Seek proper liability protection for valuable assets.
  • Offer employee benefits that could be advantageous for you and your family.
  • Review asset titles and beneficiaries for accuracy.


Succession Planning

Succession Planning

Crafting an effective agricultural financial plan is a complex process that focuses on developing a solid succession strategy to smoothly transfer the family farm to the next generation, with clearly defined timelines. 

 

If the farm represents the majority of the owner’s net worth, it is essential to accurately determine the sale or purchase price and arrange financing terms that addresses the needs of both sides of the family. Additionally, farm transition planning must consider various factors, including estate, gift, investment, elder care, business, and income tax implications.


Farm Transition

Farm Transition

A farmer's main goal is often passing the family farm to the next generation. Early planning is key, especially for those with adult children interested in agriculture.

Planning should start soon after taking ownership, focusing on diversifying wealth and creating retirement income outside the farm to ease the burden on the next generation. Gradually increasing children's responsibilities and gifting equipment or livestock can prepare them for ownership.

Farmers may not retire but will eventually be unable to work. A labor plan is essential, along with a fair price and timeline for transferring control. The transition plan should also address living arrangements, taxes, long-term care, and health insurance.

Farm transfer options involve different strategies for passing on a farm to the next generation or other successors. Here are some common options: direct transfer, installment sale, lifetime gift, like-kind exchange, and family partnership, among others.