A prospective customer recently said they were reluctant to invest in succession planning because they don’t see a clear monetary return for their family when compared to other on-farm investments.
I get it. For many farm families, succession planning feels like a future concern – something to be handled “someday.” But when viewed through the lens of return on investment, it becomes clear that proactive planning offers measurable and meaningful value today.
The ROI on succession planning isn’t just financial. It’s also emotional, relational and operational. Still, when families understand the potential costs of inaction and the value of a well-structured plan, the investment becomes a no-brainer.
Avoid estate taxes and probate costs
One of the most immediate financial returns on succession planning is reducing or eliminating estate taxes. Without planning, a significant portion of your estate may be subject to federal or state taxes, potentially forcing heirs to sell land or other assets to cover the bill. In 2025, the federal estate tax exemption is near $14 million per person, but that amount is scheduled to drop in 2026 - potentially exposing more farm estates to taxation.
Probate is the legal process of settling an estate and can also be expensive and time-consuming. Legal fees, court costs, and delays can consume 3% - 7% of an estate’s value, sometimes more. A succession plan can include tools like trusts and beneficiary designations that avoid probate altogether, protecting both assets and privacy.
Preserve wealth and protect assets
A farm is more than land and buildings - it’s a multi-generational investment. Succession planning helps preserve that wealth by ensuring ownership and operational control are transferred thoughtfully. Planning may involve setting up legal entities like LLCs or corporations, which can help protect the business from creditors, lawsuits, or personal liabilities. Without these safeguards, a single legal issue or financial misstep could jeopardize everything.
Additionally, succession planning can address the risk of unequal distributions. For example, if one child farms and another doesn’t, how do you ensure fairness without forcing the sale of land or equipment? A well-designed plan can protect the legacy while respecting individual needs.
Plan for the 5 Ds
Life happens and often unexpectedly. The 5 D’s – death, disability, divorce, disagreement and departure – are some of the most common disruptors to farm continuity.
- A sudden death without a plan can leave heirs in conflict or a business in limbo.
- Disability can remove a key decision-maker overnight.
- Divorce can divide assets unless they’re shielded within the business.
- Disagreements between family members can fester into lawsuits or fractured relationships.
- And when someone decides to leave the operation, a clear exit strategy prevents chaos.
Succession planning anticipates these events and builds in contingency plans. Buy-sell agreements, governance structures, and communication protocols all contribute to a smoother transition, regardless of the curveball’s life throws.
Peace of mind and relational ROI
Beyond the dollars and cents, succession planning delivers peace of mind. It replaces uncertainty with clarity - clarity about roles, responsibilities, ownership, and expectations. This kind of certainty can dramatically reduce family conflict and stress.
When farm families avoid these conversations, small assumptions can become big disagreements. But when handled with care and professionalism, the planning process itself can strengthen relationships and create alignment across generations.
How to calculate ROI in real terms
To measure the ROI of succession planning, consider both cost avoidance and value creation:
Cost avoidance
- Estate taxes: can exceed 40% of estate value without planning
- Probate fees: typically, 3 - 7% of estate value
- Legal battles: Family disputes can cost tens or hundreds of thousands of dollars.
- Business disruption: Leadership voids or unclear ownership can halt operations or destroy value.
Value creation
- Business continuity: preserves the farm’s earning potential for future generations
- Tax-efficient transfers: save money over time through gifting, trusts and discounts
- Asset protection: shields wealth from lawsuits, creditors or divorces
- Family harmony: prevents long-term damage to relationships
When families invest in professional succession planning services, the upfront cost, which can be anywhere from a few thousand to tens of thousands of dollars, pales in comparison to what’s preserved and protected. As one of my mentors once said, if you’re not willing to invest the price of the side-by-side you drive every day, then you’re likely not serious about planning for the future of your farm.
Final thought
Succession planning is not just about what happens when you’re gone. It’s about what happens while you’re still here. It’s about stewardship, responsibility, and legacy.
Calculating ROI may start with numbers, but it ends with peace of mind and a clear path forward. The real question isn’t whether you can afford to do it. The question is whether you can afford not to.
Downey has been consulting with farmers, landowners and their advisors for nearly 25 years. He is a farm business coach and the succession planning lead at UnCommon Farms. Reach Mike at mdowney@uncommonfarms.com.