MOUNT VERNON — Knox County farmers met at Southside Diner on Tuesday morning to have breakfast and to learn about Succession Planning for Farm Businesses. The guest speaker was Jeff Smith of PNC Bank.
Jeff Smith of Columbus, PNC Bank vice president, certified financial planner and senior wealth planner, addressed the group and explained the importance of succession planning for farm businesses.
“These are big issues and things we need to think about,” he said. “They are dynamics we need to address to preserve family farms. A lot of times heirs don’t have the money to finance the farm. And one question we have to ask is, ‘How do we handle family members who do farm and those who don’t?’
“I don’t have the answers,” he added, but encouraged the farm community to consider planning for the future.
The farm business is made up of an aging population and that creates some challenges. The answers for what a farmer will do to leave a legacy or plan for his heirs is as individual as each farm operation, so only the farmer can determine what is fair and equitable and Smith suggested PNC can help farmers explore options.
Options include ownership transitions that can include gifts, sale or inheritance. Management transitions involve creating a timeline, splitting labor and income, and examining the family relationship versus the business relationship.
Family transitions consider the children involved or not involved in the farm operation. Smith suggested that there are often specific expectations of the children working on the farm. For those not actively involved, Smith suggested life insurance proceeds was an optional compensation.
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