Family factors in personal strengths, taxes for transition
Planning how to facilitate the next generation’s access to farming is something that many families have put off for far too long.
Grant Strom and his sister Joanie Stiers are glad their family in Knox County, Illinois is not one of those families.
“Too often I hear about farm families not talking about succession plans,” said Joanie, who is part of the corn and soybean farm that includes a few beef cows. The family also owns a hay business, a large grain and storage operation with some commercial work and four tractor-trailers.
Three years ago, Doug and Marsha Strom and their two adult children, Grant and Joanie, began taking steps to ensure they had a secure plan for the future of the family farm in western Illinois.
Now Doug is 65 years old. Even though they are ahead of most families, Grant says he wishes they had started even earlier.
The plan started by “talking about what we thought we wanted,” Grant said. He had been involved in farming since he was a young boy, and Joanie has become more active in recent years. The family involved a lawyer, an accountant and a financial adviser to refine this conversation.
“We pay more for lawyers and accountants than some farmers are willing to pay,” Grant said, adding it was worth it.
Part of the goal is to plan for a transition that helps the family avoid paying excessive taxes. They didn’t want to have to sell some of the farm assets to pay taxes when settling the estate, Grant said. Another part of the plan helped transition tasks now and in the future.
About five years ago, the family began attending meetings and seminars on succession and estate planning. Joanie and Marsha attended a full day Compeer Financial pitch and met presenters they wanted to work with.
You need someone knowledgeable in estate planning who knows the tax laws and how they change at both the federal and state levels, Grant said.
“From the start, my sister and I were lucky — our parents were willing and willing to give up some responsibilities, and we were lucky to learn and earn money,” Grant said.
He attributes some of his parents’ willpower to the experiences they went through. The previous generation was less willing to transition early. They didn’t want to do the same to their children, Grant said.
“My parents wanted no secrets about how to divide up and continue the farm business, and they made sure that skill – not gender – influenced those discussions and decisions,” Joanie said.
“My parents, brother and I worked together to set goals and develop a succession plan. This plan may evolve with government policy and life events, but we set goals that allow us to continue the legacy my parents built and provide a livelihood for anyone in the next generation who is engaged. and competent to assume responsibility.
People also read…
During the transition, the family members worked on their strengths. Doug takes the lead on mechanical things and land improvements. He owns an excavator and is adept at maintaining and improving waterways. He manages the four full-time employees of the workshop and the livestock.
Grant shines in marketing and managing input costs. The timing of finding and buying inputs has been much more involved in recent years, he said. Grant plants corn. Doug directs spraying operations. The two combine at harvest.
Joanie handles all the intricacies of day-to-day bookkeeping and financial management, monitoring and developing Marsha’s work as jobs transition.
This year is the first full year that Strom Family Farm has a full partnership. Prior to this, each family member was a sole proprietor. Grant and his parents owned land together, and Grant and Joanie owned land together, which added to the complexity of recording all costs and benefits. Now the partnership owns all the land and every calf. The partners lease the land.
It’s easier to pay the bills, Grant said.
“Before, I was doing 700 checks a year. This year it’s 10,” he said.
Joanie handles a lot of that now, using software to make it easier.
This time of year, they have 11 employees with the partners, including a grain cart driver, a college intern, a high school student, and drivers for their four tractor-trailers. The next generation helps too – Grant has three children aged 6-12 and Joanie has two, aged 14 and 17.
“The biggest mistake our family made, and it was part of the way things were at the time, was not involving my sister early on,” Grant said.
While he worked outdoors with his father to learn how to use equipment, Joanie worked with his mother indoors to learn how to cook and learn other traditional skills.
“My sister is more of a farmer’s soul than I am. She is 150% farmer,” he said.
Currently, Joanie is working on getting her CDL training to drive trucks. It would have been easier for her if she had learned to drive a stick shift when she was younger, like Grant did. With that in mind, they bought a used Jeep to teach their kids.
“We’re not going to make that mistake in our generation,” he said.
They talked about the whole traditional mentality of women’s jobs versus men’s jobs.
“We want to break that traditional stereotype,” Grant said. “I started cultivating early and accumulated wealth that my sister didn’t have at the time. I bought land with my parents. His opportunities were not the same as mine. I was aware of it.
They have taken this awareness into their transition and succession planning, knowing that both generations are helping to make the farm profitable together.