Charting the future of the family farm

Problem: When should we talk with our children about our plans for the farm?

Our daughter will be home for our extended family reunion. She wants to talk to her dad, brother, and me about the farm. Dad turned 70 this year and she feels it’s time. I agree. My husband and I currently own all the land and our son purchased one-third ownership of operations. He has farmed with us for 25 years, works hard, and manages every-thing. He makes sure my husband and I are included as the business grows and that the farm pays us what we want and need. Our daughter lives two states away, and she and her husband have great jobs in health care. They are not interested in the farm. Are there things we might consider as we have this conversation? 

- Submitted by email from S.L.

Solution:

Yes, consider these points:

• Celebrations are not the best time for a business conversation.
• You and your husband have much work to do before a conversation with your adult children.
• Stating that your daughter is not interested in the farm is your assumption.
• Your daughter and son are both interested in your plans. They may or may not have different expectations, fears, hopes, and goals.
  

I am glad there is a sense of urgency for a conversation, yet I suggest you avoid having this important meeting during celebrations and schedule it for later in the year. This way, it doesn’t “cloud” the event and gives you time to prepare. Gathering information and meeting with key advisers (CFP, CPA, attorney) may take several months. This family business meeting is not a “get it over with” discussion, but rather a thoughtful, planned conversation to share your expectations and goals, and listen to theirs.

First, you and your husband need clarity and agreement on:

• What is needed to provide financial and physical security for each other? Carefully consider health care and a lifestyle you each deserve. 
• What do you own? What do you owe? 
• What are your estate wishes for your son and daughter? 
• Do you want the farm operation to continue?
• Who is best to do that? How can this be done?
• Are you considering fair and equal and equitable?
  

If you want the farm business to continue, you will need to secure the management, leadership, and ownership of the business assets. Options to transition these assets during your lifetime and through structure documents and backed by a will are critical. 

A certified financial planner will help you find answers for your security; your attorney and accountant will provide options to assure your farm and estate goals are financially sound and backed with necessary legal documents.  

Once you and your husband have the conversations and agree, write your goals for taking care of each other, for transition of the business, and for estate distribution. Then make appointments with each of your key advisers. After you have drafted documents and notes from the adviser meetings, schedule a family meeting.  

It’s time to move from silence to transparency. Share your intent and initial documents. Let them hear “the what and why.” Ask for input. Take notes as your son and daughter share ideas. Then, meet with each of them separately to make sure you understand. Do not assume their wishes and expectations. Remember, you love them and will consider their input, but it is you and your husband that make the decisions. Then review, revise, and sign the documents.