At our final Farmers & Ranchers College program for the programming year, Dr. Ron Hanson from the University Of Nebraska – Lincoln Ag Economics Department spoke on the Importance of Family Farm Succession. This is never an easy task, yet essential for the farm to be passed on and able to financially operate. Most importantly, it is important to maintain relationships with family members and honor the wishes of the parents who intended for assets to be transferred a certain way.
Hanson had eleven challenges families face in order to being this process.
- First consider “Who is family” and is entitled to owning the farm. Are in-laws considered family? Usually excluding in-laws will backfire and cause hard feelings.
- It is difficult for parents to not play favorites with their adult kids. Parents should be fair and equitable, which is different than equal. Unfortunately, there are adult kids who are greedy and plan to retire on their parents’ assets, which is not an acceptable retirement plan. Parents should consider who has always taken care of them and which kids will care for them in end of life situations.
- Controlling parents need to give control of the farm/ranch to the adult kid who is farming. Serve as mentors and hand over responsibility to the future owner.
- Consider when farm ownership will happen. How will those changes occur?
- Think about if it is possible to keep the farm in the family. Are there kids who actually want to farm?
- Too often families don’t talk about the “what-ifs”. If a parent or adult kid were to tragically die tomorrow, are you prepared for that?
- If parents don’t agree on how to transfer assets, more than likely nothing will get done.
- Some children feel they are entitled. Children should RESPECT their parents and agree to their parents’ decision. Your parents don’t owe you anything.
- Greed has become a curse of family wealth and assets. Wealth can destroy family relationships and end a family legacy. No farm is worth losing family relationships!
- Families that don’t communicate openly about the parents plans are more likely to be unsuccessful with a succession plan. Parents must talk openly and honestly to all children – preferably at the same time. Parents should ask their children:
- Have we as parents done anything to make you not get along as a family when we are no longer here? If so, please tell me. Then apologize.
- Is there any reason you kids can’t get along as a family?
- Each family farm/ranch should have a vision. Family members should share this vision.
Family farm succession is time consuming, complicated and emotionally draining, but essential! After all, consider all of the hard work you have done to keep it going through rough economic times; why wouldn’t you put a plan together to protect it?