Inside the Farm Succession Crisis: The Harsh Truth for Family Farms

Family farms are at a turning point—and for many, the future is uncertain. At Wagner Oehler, Ltd., we work with farm families every day who are trying to navigate one of the most emotionally and financially complex challenges they’ll ever face: succession planning.

We are in the middle of a farm succession crisis, and the statistics speak for themselves:

• Fewer than 40% of family farms successfully transition from the first generation to the second.
• Less than 20% make it to the third generation.
• And only a small fraction survive to the fourth.

Why is that? And what can be done to protect your family’s legacy?

The Communication Breakdown

One of the most common problems we see is a lack of communication. In many families, the next generation hasn’t clearly expressed their commitment to the farm. Meanwhile, the current owners may assume their children aren’t interested—or may avoid the topic entirely.

Shockingly, up to one-third of family farms haven’t identified a successor. If we don’t know who is meant to take over, how can we plan for a successful transition?

If you’re a farming heir and see the farm as your future, now is the time to speak up. Let your parents know. These conversations—though uncomfortable—can be the difference between keeping the farm or losing it.

Equal Doesn’t Always Mean Fair

It’s natural for parents to want to treat their children equally in their estate plans. But in farm succession, a strictly equal distribution can set up your farming heir to fail.

Here’s a realistic example:

• A 400-acre farm valued at $10,000/acre = $4 million
• Three children: one farms, two do not
• The farming heir is expected to buy out the other two

That’s a $2.6 million buyout. Over 20 years at a 7% interest rate, that’s $250,000 per year—before accounting for operating expenses, property taxes, groceries, or basic living costs.

Even with a discounted price, the numbers are often still unmanageable. If you wouldn’t be willing to write that check each year, it’s worth asking: Why would your successor be able to?

Rising Land Values, Flat Farm Income

Many farmers underestimate the value of their estate. You may not feel wealthy—but land values have tripled in many areas over the past decade, even while farm income has remained relatively flat.

This inflation in land value has created a disconnect between what a farm is worth on paper and what it can actually generate in income. And that disconnect has enormous implications for estate taxes, buyouts, and fairness among heirs.

There Is a Way Forward

The good news is: there are solutions. But they require intentional planning.

• If you want to treat your children fairly, consider life insurance, off-farm assets, or structured buyout terms that reflect what the farm can support.
• If you plan to pass the farm at death, your estate plan needs to be rock solid—and customized to your family’s values, goals, and unique situation.
• If you’re unsure where to start, talk to someone who understands both agriculture and estate law.

At Wagner Oehler, we don’t believe in one-size-fits-all plans. We sit down with farm families, look at the numbers, and help them develop a practical path forward—one that keeps the farm in the family and respects everyone’s role.

Don’t Wait Until It’s Too Late

Succession planning is hard. It’s emotional. But ignoring it is far worse. If you want your farm to survive the next generation—and the one after that—start now.

We’re here to help.

? Contact Wagner Oehler, Ltd. to schedule a consultation with a farm succession attorney.
? Explore resources at www.wagnerlegalmn.com
? Follow Jason Wagner – The Farm Lawyer on YouTube for more insights.

Let’s protect your land. Let’s protect your legacy.