Transition planning involves preparation for the sale or transition of a business when the founder is ready to retire or exit the farm operation or business. Planning for that eventuality can be a complicated and overwhelming process. It's a process which includes a review of the current state (i.e. share ownership, tax efficiency, risk management, estate distribution, etc.) and exploring options that will help you make better decisions. The best time to develop a transition plan is well in advance of when you actually plan to leave the business or ag enterprise. A proper plan will allow a business or farm owner to effectively transition in a variety of scenarios, not just a planned exit. It will also contemplate sudden departures of business partners or if there is an offer to purchase the business down the road.
Key elements to transition planning include the following:
- Knowledge transfer
- Estate planning
- Business value
- Risk management
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