Posted 3/29/2021 12:34 (#8922953 - in reply to #8920696) Subject: RE: advice on retirement
Thumb of Michigan
Just shooting from the hip, here:
In your situation, its not terribly different than what many multi generational farms wrestle with. I know you're not old enough to be the Dad here, but the situation is similar.
My Dad and I operated as a C corp, with the land first held as a FLIP. and then as a LLC. Still that way far as that goes. As my Dad aged, he was spending less time actually on the farm, but he had some things that he was in charge of- even though it was him that declared which things that may have been. Which I was absolutely fine with. For example- stealing from a good friends example of what his Dads favorite thing to do, and it was the same with mine. Our combine cab resembled the Popemobile in a couple ways. One was that my Dad was the Pope and only the Pope gets to ride in the Popemobile.
OK, back on topic: we covered about everything we needed to cover in our original operating agreement. Thats all luck, not management. Retirement wasn't mentioned anywhere in the document. Not sure what we'd have done to allow for it, or that we needed to do so. We each had a vehicle, health insurance, and a relatively small salary provided when we were actively farming. Age or level of activity really wasn't pertinent. He was still drawing a salary up until his death, and had been bed ridden for 6 months. I was absolutely OK with that, but I realize thats not optional in some operations.
I also know of farms that have had some spread in age and the older partner wanted to retire. There were talks for maybe a year ahead of the actual event, sometimes not all pleasant conversations, but they got the job done. Not sure if theres any actual purchasing going on as far a getting paid for stock, or if its a rental type of arrangement. The "retired" brother still gets dirty when he wants to, but if the fish are biting, they have to find someone else to fill in for him. I think its working for them as well- but again, it wasn't something that got accomplished in one afternoon over a couple beers. In there case, theres another generation potentially in the wings, and no one wants the C corp to be less healthy than it currently is. I think thats all a possibility, but it may take someone from outside your operation you need to consult with to see the forest for the trees.