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Leaving a Legacy or a Landmine!
By: Jane Eckert

The harvest season is over and it’s time for some winter reflection regarding the lasting legacy you plan to leave your family. Unfortunately, so many farm owners that I’ve met do not want to have these types discussions with their children.  They avoid conversations, much less serious planning regarding future property divisions, buy/sell agreements, establishing a succession heir or creating a sound business plan for the future.  Instead, it appears that “dad” (or the major asset holder) would rather not discuss or think about his possible demise or to make some of the tough decisions to ensure a future legacy for his family.  He’s not trying to be rude or mean, it’s just that, well, it’s complicated, and it’s personal.

The average age of farmers today is near 60 and none of us are getting any younger.You truly have a choice here – plan ahead and leave a lasting legacy of your farm with other family members or trustedemployees—or do nothing—and create a future landmine where your farm assets may have to be sold to satisfy some ofthe non-farm working heirs and create an irreparable family divide. It’s up to you “dad.”  How do you want to be remembered? 

Family business planning and transfer of ownership is certainly not a new topic and it is not easy to think about, but truth is it may be the most important topic you can discuss with your children and your professional support network.  In my opinion, in order to help make these types of decisions, outside professional assistance is not just recommended, it’s mandatory.  None of us can understand the full tax consequences in transfer or sale of ownership.  There are the legal issues and documents that will need to be drawn up, and most importantly, the family dynamics in creating and sharing your legacy not only for your children but also your grandchildren.  Yes, your children and their spouses need to be heard and understand the planning process.

For many of us, our farm has been in the family for multiple generations and we need to decide how to keep the legacy of the land for those best qualified (both in terms of skills and desire) to preserve it.  Often, that does not mean equal distributions, but inequalities may be necessary in order to preserve the farm. 

I recently had a phone conversation with Jolene Brown, a farmer, a speaker and farm family consultant that talks about these very issues.  Jolene is conducting a workshop at the Great Lakes Expo in December of 2014 and I highly recommend you go and hear what she has to say, or go to her website www.jolenebrown.com for more information.

Jolene works with individual farm families that are ready and willing to make decisions and act upon them.  She understands the dynamics of families and wants to talk with everyone individually, then get them around the kitchen table for a shared dialogue.  Jolene shared with me that she turns down many more farm consultations than she accepts because the major asset holders are not ready to make these decisions or to have these open discussions and follow through with appropriate action.  They must be financially and emotionally ready.

Her approach with consultations begins with four valuable tools.

#1 A mirror. Most would like to “fix” or change someone else or have others make the decisions.  Jolene shares that each plays a role in a legacy plan and also, all must start with reality.  Where are you today? Do you want the business to continue? What are you transitioning - labor, management, leadership, ownership? When With whom?

#2 Box of tissues. Jolene has learned that there is always emotion – anger, fear, resentment, concern.  She knows that when emotion and logic collide, emotions wins and therefore must be addressed.  Everyone in the family has a right to be heard, but we do recognize that some have more decision making power than others.

#3 Duct tape. This is used not just so we listen to everyone, but that they also remain present and involved.  You will need to “stick to your seat” with no walking out when you disagree with others and also there is no leaving the meeting if you’ve pronounced what you want without consideration of the affect.  This a family business meeting with a specific process of decision making and action.

#4 A 2 X 4. Jolene says, “Sometimes there’s no other way.  You just have to get attention, focus in order to make the hard decisions.”

Jolene says she can be very blunt in talking with the family members but feels this approach, based on lessons learned from her 30 years of consulting with farm families is why they want her as part of their legacy building process.  Jolene and I have both worked with families that want to have a family-first business, yet in our opinion, those farms that are succeeding and ensuring their legacy have created a business-first family.  Jolene says, “If you want to honor the family you’d better do the business right.” Managing and leading as a business is what has allowed generational business to survive and thrive. 

Jolene’s approach to consulting with family businesses begins with considerable work before she arrives on site.  Focused meetings are held with individuals, owners, full-time employees and all family members.  When she leaves you have appointments made with local professionals (attorney, CPA, financial planner) to complete the process.

There are certainly other professionals who can give you an unbiased set of ears who provide farms with guidance on succession & business planning for the future.  I recently talked with Mo Tougas of Tougas Family Farm in Northborough, Massachusetts.  Mo shared with me that he is 5 years into a 10 year plan of transitioning ownership to his son Andre. They have worked with Farm Credit East in New England to help them implement a legacy for farm transition, and he has been pleased by the process.

The message today is that it’s time to get the conversations and the thinking process moving ahead. Whoever is the major asset holder in your business has the choice of leaving a lasting legacy or creating a landmine for those that follow.  Yes, it’s personal, and it’s important.  What type of farm owner do you want to be?

Be sure and check out the website and blogs at www.jolenebrown.com. for more information about Jolene.

Jane Eckert, a national speaker, author and agritourism expert, is principal of Eckert AgriMarketing (www.eckertagrimarketing.com), a firm that helps farmers sell products directly to consumers and develop their operations into tourist destinations, and Farm Web Design, an Internet marketing firm specializing in agritourism farm websites.  She is also CEO of RuralBounty.com, a consumer based directory of agritourism farms in North America. Jane can be reached by phone 314-862-6288 or at jane@eckertagrimarketing.com