Communicating with the family is critical to the process of planning transition of the farm to a new generation, says Farm Credit Canada transition specialist Val Panko.
“Communicate, decide roles, who makes decisions when Dad stops,” she told an RBC farm meeting.
“Don’t assume you know their thoughts and feelings. Communication is one of the biggest pieces of a succession plan. It is really something to focus on.”
Not including children living off the farm in discussions “kind of says you don’t really value their opinion.”
It’s important to include all the players even those not directly involved in management of the farm.
“It’s almost a sad thing in society that we have reduced in some cases how a parent feels about a child in the number of zeroes behind their name on the will.”
An estate lawyer told Panko none of his clients knew beforehand what was in the wills they were contesting.
“Talk to your kids about how you feel about them. Don’t leave it up to your will or let them write their own narrative and take the wrong message out of it.”
When planning the transition “focus on what you want in the end. Make sure you think hard about the outcome you want. Spend some time thinking about it, talking about it, making some decisions.”
Lots of transition plans focus on money and tax planning, both important matters, but Panko says deciding on what outcome is wanted is also important.
She suggested setting some goals, deciding what your retirement will look like, who makes what decisions, and what happens if and when the senior partner dies.
“Think and talk about how this will go. What kind of gap will there be if the junior partner gets no decision making?”
There are no right answers when dealing with non-farm children. “This is a tricky one” that needs to be talked about.
“Decisions have to be made. It’s not a good idea to split a farm up to render it unviable just so you can be fair and equal to everyone.”
Discussions include the potential need for an employee when the father steps down and “conflict management when it happens – talk or go silent and blow up later.”
Pre-nuptial agreements are fine. She suggests a third party bring them up as many people are scared to raise the matter.
“When you have good idea of what you want bring on expert advisers to help implement the plan.”
Ron Walter can be reached at ronjoy@sasktel.net
