Owning a farm carries fundamental risks. As any business owner will tell you, the name of the game is not necessarily eliminating risks altogether but rather developing contingencies to handle them as well as plans that are flexible enough to withstand day-to-day uncertainties. You may have already had to handle lousy harvests, untrustworthy farmhands, irascible animals, competitive Big Ag businesses, spikes in vendor prices and other hazards. So far, you have persevered. However, the following types of setbacks can throw off your plans.
#1. A terrible problem with the farm itself.
A fire, complete failure of the crops, staff mutiny during a major harvest, takeover bid from a bigger farm, or another devastating contingency could render the biggest asset of your business much reduced in value and potentially put you into debt. There is no simple playbook for how to handle these devastating eventualities, but they could happen.
#2. A health issue could render you sick and unable to work… or create major problems for your employees (and thus for your farm).
For instance, a tractor accident could cause serious injuries to two of your workers, which would not only leave you two workers short but also burden you with worker’s compensation obligations and higher insurance rates. Or you might get sick or injured yourself, ten years before you plan on retiring, creating problems for the farm’s operations and management.
#3. You may suddenly discover (or take on) surprising responsibilities that you hadn’t anticipated.
For instance, let’s say that you have a daughter who has moved away from Ohio to raise her family in the suburbs of New Jersey. But her husband gets really sick or abandons the family, and now she needs your help taking care of her two children. Her family moves back to live with you and your spouse, creating unexpected obligations and commitments.
Or maybe you discover another passion beyond farming and decide that you want to “switch careers” and follow that dream. How might this epiphany effect your long term planning?
These kinds of unexpected surprises – what bestselling author Nassim Taleb once dubbed “black swans” – can strike when we least expect them. The way to manage black swans, according to Taleb and others who study contingency thinking, is to prepare in a conservative fashion.
The more detailed and effective your plans, the better you will be able to adapt, if and when dramatic setbacks strike. Whether you need help with Ohio farm estate planning or assistance handling an emergency issue, Gudorf Law Group is here to help you. Please call us now at 1-877-483-6730 for a free consultation.