by: Keah Munsen, Instructor
Transitioning farm ownership is never an easy task. Now more than ever, the importance of protecting yourself and additional owners is vital. If your family operation is deciding what to do with estate planning, it is very crucial that you talk to an estate planner as soon as possible. Communication between parents and possible heirs to the business isn’t always something that is easy to discuss during lunch or at family gatherings. Working with an estate planner is essential to be sure all owners are aware of what is to happen during a transition and ease the stress and pain of how to divide the assets.
How the older generation thinks does not mean the next generation is thinking in the same way. Sometimes in operations, we assume that the next person understands exactly what we are talking about. When was the last time you had a meeting to discuss possible expansion or changes in your programs? In many cases, the primary managers of an operation have been in agriculture all of their lives and may not consider the importance of involving the next generation, who will one day be the managers, in the decision-making process. Communication early on about operational decisions can help the farm or ranch carry on from one generation to the next, as the younger operators will feel empowered to make decisions on their own because they have a full understanding of how and why things were done in the past.
It can help to have a third party involved who rides the fence and helps get the communication started and helps control some of the emotions. A person would think that with email, Facebook, Snapchat, cellphones – and who knows what is next to come – that communication wouldn’t be an issue. The problem could be that we do communicate, but only on the issues that are easy to discuss.
Start out the upcoming quarter with these suggestions: Set a date for a planning meeting and let everyone know in advance. At the first meeting, come up with a list of areas of concern and their priority on the list. During this time, let everyone add to the list. By doing this, you are letting everyone communicate. Bring up topics that are positive and areas that need improvement. We want everyone to end the meeting feeling like they have contributed.
We would be happy to discuss the process with you, as well as get you in touch with a legal professional in your area, if needed. Feel free to contact the South Dakota Center for Farm and Ranch Management at [email protected] or 605-995-7193. Or you can also visit us online at sdcfrm.com.
