Whether you are just starting out or have been working on this for a long time, here’s a list of the top 10 tips for farm families going through the farm transfer/succession process.
Top 10 Tips:
- Don’t be afraid to get help– Talking over the farm transfer/succession process with a professional helps to keep the momentum going and to overcome any bumps. Worried about cost? Extension educators make great mediators, can provide you with some of the information you need, and can help you form your questions to make better use of a CPA or attorney’s time. Plus Extension educators are free!
- If you can, start early– It’s best to get the process going earlier than later. It’s never a good situation when there’s been a death of one of the parents and the living spouse is now trying to figure out what to do with the farm. Starting early can also help you establish protections from the nursing home taking the farm. It also gives the family plenty of time to adjust to role changes, transition over assets, and establish a plan for the future.
- Be fair, not equal– A lot of parents feel strongly about being equal to all their kids when it comes to passing down their assets. When it comes to the farm though, we encourage parents to consider being fair, rather than equal. Children who have worked on and been a part of the farming operation, especially if they want to take it over, should be treated differently than children who have not. And that’s okay! The purpose of farm succession is to make sure the farm continues into the future. If the home farm is divided equally 8 ways, the kid/s who want to farm are going to have a hard time doing it.
- Make sure everyone is involved– Ah, the dreaded in-laws! Yes, while you might prefer to deal with them for short periods of time and not very often, they do need to be a part of the conversation. Spouses of children need to feel involved in the process; remember, according to Wisconsin law, they own half of everything in the marriage. Unfortunately, all too often marriages end in a nasty divorce and can end up negatively affecting the farm business. It’s best to keep them in the loop.
- Get it in writing– In today’s world, a handshake and a verbal agreement unfortunately do not carry any weight. When it comes to land contracts, agreements for the farming kid/s to take over certain aspects of the farming operation, or wills, it’s vitally important everything is put down in writing. That way the ‘he said, she said’ argument doesn’t happen.
- Be aware of the needs of non-farming children– Non-farming children may not be involved in the day-to-day operations, but they do have an interest in their parents’ assets. They will want to know what is coming to them and it’s best to be clear and upfront with them about your intentions.
- Be aware of the family dynamic– Farms are family businesses, and as such, family is naturally interwoven into the fabric of the farm. Family dynamics can present challenges for farms because they bring along a lot of baggage which can negatively affect the business in the form of conflict. While the farm and family can’t always be separated, steps can be taken to make sure the business comes first, when it’s appropriate. For example, when farm business needs to be discussed, have a formal meeting, complete with agenda, separate location (i.e. not the kitchen table), and ground rules.
- Farm meetings make all the difference– Whether you are meeting with your employees or other farm owners or partners, it is important to meet regularly. Many farmers meet monthly to keep everyone in the loop and address any issues right away. And it doesn’t have to be a day-long meeting. Short meetings work well to keep people on task and so the meeting does not feel like a burden.
- Be honest– This might seem like common sense, but it’s surprising how many times farm family members are not honest about their feelings, needs, wants, or their opinions. We always say in meetings we facilitate, “silence is acceptance”. If you don’t speak up, then your silence means you are okay with what’s being discussed and decided. Honesty isn’t just about speaking the truth, but speaking up in general. Too often the younger generation or spouses of any age, will keep quiet because of family roles (i.e. parent vs. child or husband vs. wife) or because they feel their voice will not be welcomed (i.e. in-law). This causes long-term hurt in the person not speaking, and keeps new ideas from coming forward for the good of the group.
- Don’t let things stagnate– We’ve all done it. You go to a workshop, get excited and write down a list of to-dos related to farm succession, then you go home and the list sits on a shelf somewhere. It’s easy to let things go when everything that needs to get done on a farm is calling. Make an effort to revisit that list or plan regularly. Keeping it fresh in your mind means you are more likely to act on it.