The Retiring Farmer™ Wealth Management Process Identification of overall aims and interests and the means of achieving them. Learn more The Retiring Farmer™ Wealth Management Process Many of today’s farm families have achieved historic levels of success in the efficient production of agricultural commodities. In turn, this has now provided them with financial security. This success is due to hard work and adapting to modernizing farming techniques and evolving technology. Canadian farmers have achieved a reputation as global leaders in production and agricultural management. This prioritization of production has left a void in farm management of retirement, liquidation, or succession as these concerns arise toward the end of your farming career. The Retiring Farmer™ Wealth Management Process provides a lean, structured, and thorough format to the management of farm retirement, liquidation, and/or succession. The process avoids the widespread notion that there needs to be a complex and confusing process. This is accomplished through: Balanced input Thoughtful consideration Prioritization Selection of a course and direction to accomplish “What Is Important to You” And finally, provides a highly focused implementation action plan detailing specific action items in support of your course and direction Following The Retiring Farmer™ Wealth Management Process will greatly improve the likelihood of you achieving the results you want in a meaningful and understood manner. Steps to The Retiring Farmer™ Wealth Management Process What’s Important to You? Where Are You Now? Where Do You Want to Go? How Will You Get There? Next Step Step 1 What's Important To You? When you know what's most important to you, making a decision is simple. Learn more What’s Important To You? Human nature is to talk about the complications of our lives and yearn for easy answers. This tendency leads to procrastination without action until change is forced upon us. At best, we seek advice to singular issues that most often do not fully address the real issue of concern. Typically, farm business managers have worked alongside professionals that have training and experience in specialized areas, such as: accounting, taxation, law or financial and risk management. Their concerns are often prioritized by the professional’s specialty rather than around the concept of “What’s Important to You”. With this type of process, only one part of the puzzle is found and farmers are often left even more uncertain and confused than when they started. The Retiring Farmer™ Wealth Management Process focuses first on “What’s Important to You”. This is different from goals and objectives and certainly does not consider product or professional service solutions. “What’s Important to You” are those important and lasting beliefs or ideals you hold that are good or bad and desirable or undesirable. Such principles have a major influence on our behavior and attitude and serve as the major guideline of our family and farm life. “What’s Important to You” is expressed in many ways. Working with Canadian farm families, The Retiring Farmer™ has found this unusual question is quickly summarized into four groupings: Financial security for the retiring generation Fairness among both farming and non-farming children Will farm land be sold or retained for children or grand-children Minimization or elimination of income tax Understanding how “What’s Important to You” fits among these four groupings allows you, your family and your professional advisers to focus on the “big picture”. That is, the creation of a comprehensive master plan that coordinates the accounting, taxation, law, financial and risk management aspects of your financial and farm life. From this discussion your goals and objectives become clear and defined. Next Step Step 2 Where Are You Now? To set objectives and to figure out how to achieve them, requires knowing where you are now. Learn more Where Are You Now? One of the most difficult tasks farmers encounter is to accurately assess where they currently are on the road to where they want to go. This anxiety distracts attention from where you are now to where you want to go. The first step to understand where you currently are is to distinguish reality from where you believe you are. You need to be objective and be well informed of all matters related to your financial, tax, and legal affairs. If not, you run the risk of assuming you are much closer to where you want to go than you really are. It is important not to be overly optimistic as in doing so you will overlook what needs to be done. It takes discipline to control your optimism and to seek input and advice from professional advisers who have the experience that you do not. The Retiring Farmer™ Wealth Management Process assists Canadian farm families with understanding where you currently are through gathering relevant data, such as: Prior year personal/corporate tax returns Prior year corporate financial statements Life insurance policies Pension and investment statements Wills and Power of Attorney documents Compile a listing of all property owned and all amounts owed to others Indicate who owns each property and who is legally responsible for each indebtedness Determine what was paid for each property (historical cost) Determine the tax value of each property Determine the monthly/annual cash needed of each individual dependent upon the success of the farm Next Step Step 3 Where Do You Want To Go? If you don’t know where you are going any road will get you there - Lewis Carroll Learn more Where Do You Want To Go? Once you have taken a snapshot of where you are now, you will have a clearer picture of the skills and strengths that have gotten you to where you are today. You can now begin to consider, where it is you would like to go and start exploring alternative strategies of how you can get there. You may find it useful to ask yourself the following questions as they apply to both your farm and non-farming life: 1. What does the ideal life look like for me? 2. If I could do anything in the world what would I do? 3. What are my goals both short-term and long-term? 4. What renews my energy and wakes me up? 5. Where do I want to be in 1, 5 and 10 years? 6. What specific challenges do I need to address? 7. Who else is effected by the decisions I make? 8. What can get in the way of achieving my goals? 9. Do I have sufficient wealth to accomplish my goals and objectives? 10. Who do I need to engage to help me though the Wealth Management Process? Next Step Step 4 How Will You Get There? Simple. By following The Retiring Farmer™ Wealth Management Process. Learn more How Will You Get There? How to get there is a simple three step process: Develop strategies and initiatives (lifestyle, tax, or financial) Create an implementation action plan Ongoing monitoring and updating Learn More About Each Step Below: Supporting strategies and initiatives The majority of farmers have built a successful farm business over many years through hard work and becoming knowledgeable with farm management practices needed to efficiently and profitably grow crops and/or raise livestock. They have not had the time or interest in acquiring expertise with farm taxation, retirement or succession issues. For this reason, at the retirement or succession planning stage of a farmer’s career, professional experienced expertise is needed to achieve the goals and objectives of the farm family. Through The Retiring Farmer™ Wealth Management Process, Farm Specialists will create the strategies to reduce taxation on the liquidation of the farm or to tax efficiently transfer the farm from one generation to the next. In each case, strategies and initiatives will ensure the goals and objectives of all family members are understood and achieved. Implementation Action Plan To successfully achieve all goals and objectives, an Implementation Action Plan will: Document each specific strategy or initiative Confirm the farmer’s understanding and acceptance of each specific strategy or initiative Confirm who is responsible for implementation Set dates each action item is schedule for completion Confirm each action item has been successfully implemented Monitoring and Updating Once each strategy or initiative has been successfully implemented it is guaranteed that the world and our personal lives will subsequently change. For this reason, the overall plan must continually be monitored and updated. This may require a complete review through The Retiring Farmer™ Wealth Management Process or it may mean that only minor adjustments are needed. The Retiring Farmer™ Wealth Management Process continually monitors and updates your Wealth Management Plan on an ongoing basis. This will require frequent in-person meeting for the first year or two. Thereafter, our advisors will meet with you to review the progress of your affairs as often as is needed, usually two to four times annually.