Farm Succession Risk Management Checklist Online
Funded by United States Department of Agriculture

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Author: Dr. Patricia Frishkoff

Instructions for Farm Family Members:

You are about to consider a series of questions related to farm succession. You will mark YES or NO for each question. If you don't know the answer to a particular question, mark NO.  If the answer is partly both, mark NO.

Please answer from your own perspective.  As a family, you'll benefit the most if each involved family member completes the checklist.  You'll be able to print your answers and the results to discuss together as a family, but don't collaborate in completing the checklist.

The questions refer to the senior generation and to the next generation.  Before you start, interpret those terms so that they make sense in your situation.  Generally the senior generation will be those family members having the most control on the farm and in ownership.  The next generation refers to those who would take over management and control.

For each question, check YES or NO as appropriate.

1.   Does everyone have a voice in farm decisions?
2.   Has the senior generation communicated its intentions to children and their spouses?
3.   Are important papers stored in a secure place known to key family members?
4.   Is there a written ownership and management plan for the farm?
5.   Is the next generation sufficiently experienced and skilled to meet the challenges of farming today and in the future?
6.   Is the next generation passionate about farming?
7.   Do you have a written or recorded history of the farm?
8.   Is the farm a place where the family has good times together?
9.   Is there an ownership plan that is fair to those family members working on the farm?
10.   Is the next generation willing to make significant sacrifices to farm?
11.   Does the plan for the future preserve a viable farm or farm structure?
12.   Can the family hold special events without the farm dominating conversation?
13.   Does the next generation know the wishes of the senior generation for when death occurs?
14.   When conflict arises, is it brought into the open and resolved quickly?
15.   Does the senior generation want to continue the business as a family farm?
16.   Does the next generation want to stay in farming?
17.   Are family members willing to work to keep the farm for others as well as for themselves?
18.   Does the senior generation trust the capability and commitment of the next generation?
19.   Does the ownership plan provide opportunities for those not working on the farm?
20.   Does the next generation understand the implications of bad yields and poor prices?
21.   Can the family discuss farm issues in a business sense, without becoming entrenched in family roles and patterns?
22.   Do family members tell stories about the farm?
23.   Will the senior generation be willing to relinquish control?
24.   Could the next generation take over successfully if the senior generation could no longer farm?
25.   Do family members listen to one another?
26.   Could the senior generation afford, financially, to retire?
27.   Is love evident in the family, even when doing farm work?
28.   Does the family talk openly and honestly about the farm - its future and its problems?
29.   Is the next generation prepared to advocate publicly for farming and its needs?
30.   Is the senior generation actively teaching the next generation?
31.   Are family members sufficiently covered by health insurance so that illness could not put a financial strain on the farm?
32.   Do senior generation family members have signed wills, reviewed and updated within the past five years?
33.   Does the senior generation have a reasonable sense of the worth of the farm and its operations?
34.   Is the family informed about and prepared for the impact that taxation may have when senior farm owners die?
35.   Is there adequate insurance for these varying needs?  -  To fund a buyout. - To pay taxes. - To cover debt. - To provide income for surviving family members?
36.   Have legal aspects related to the farm, including such things as entity structure, leases, and other agreements, been reviewed within the past five years?
37.   Has the family considered legal means to preserve the land as farmland?
38.   Is the next generation active in farm-related activities in the community?
39.   Will the next generation be as capable (considering education, skill and expertise) as the senior generation?
40.   Have you explored diversification as a means to having a more viable farm?
41.   Is the family clear about circumstances in which they would sell the farm?
42.   Can the next generation get along running the farm together?
43.   Have the generations made plans together for the future of the farm?

    
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      Copyright 2009. Austin Family Business Program. All Rights Reserved. Last Updated 10th March 2009.