Transition Planning Strategies CENTRA Training May 14, 2013 Dr. Shannon FerrellDr. Rodney Jones Oklahoma State University Department of Agricultural Economics Assistant Professor, Agricultural Law OK Cooperative Extension Service Area Extension Agricultural Economics Specialist Outline Elements Tools Barriers Conclusions Why should I care? Founding Generation Second Generation Third Generation Fourth Generation 30% 12% 3% Iowa Farmland Ownership by Age Source: Iowa State University Extension (Duffy and Smith, 2008) 55% Challenges for the Aging Farm Owner Perspectives for the closely-held farm business Family Legacy Business Assets Why should I care? 3x to 4x Poverty rate of widows compared to same-age married women Why should I care? 55% Percentage of U.S. adults with no estate plan in place Elements of Transition FounderSuccessor Elements of Transition Founder On-farm heir Off-farm heir Unrelated Successor Liquidation / Dissolution Ownership Control Participation Separate Entity Elements of Transition Founder On-farm heir Off-farm heir Unrelated Successor Liquidation / Dissolution Ownership Control Participation Separate Entity Elements of Transition Founder On-farm heir Off-farm heir Unrelated Successor Liquidation / Dissolution Ownership Control Participation Separate Entity Estate Tools Estate Tools - Others Ownership Tools Business Entities Transactional Tools Barriers to Implementation Communication Equitable considerations Farm kid / city kid Sweat equity Willingness to transfer Conclusions Producers, we can transfer it. We have the technology. Do producers and professionals understand the tools and their impacts? Are producers willing to engage in true transitions? THANKS! Dr. Shannon L. Ferrell OSU Department of Agricultural Economics