Imagine how wonderful life would be on your farm if you did not have to guess what other folks on your farm team really want for their lives, and for the farm business?
I had the great joy of speaking to 540 young Iowa farmers last month. Many of them are stuck in getting equity in transition, due to U.S. tax laws which incentivize holding onto land and assets until the death of the grandparents or parents. I suspect you have your own story of curiosity as to why you are not able to get what you really want (power and control of the management, equity to grow and service debt, new housing, a peaceful workplace, et cetera).
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What do you truly want for the next chapter of your life on the farm?
Why is this such a hard topic to openly communicate with your family?
When are you going to make your lifestyle desires and farm business vision known?
Please go back and read those three questions again. The farm founders and successors need clarity of expectations. Here’s a text from a young Iowa farmer who speaks for many young people who are anxious about the uncertainty of their future:
“What are the best ways to deal with off-farm siblings that haven’t shown interest in the past, or put any work into the operation, but now all of a sudden want a piece of the pie?”
My answer to this farmer was, “Have a coaching session with third-party facilitation. Keep it safe and respectful.”
Most folks want their family to get along, to have a profitable farm, and not break off land to non-farm heirs. Your family may have a culture of “Grandma has four kids, so each kid will get a quarter of the land.” This is creating great havoc and stress for folks who cannot see another solution.
Where is it written that all adult children need to get land?
Are there other assets like non-farm property, cash, insurance, investments, diamond rings, vehicles, art, oak desks which can be passed on? The issue here is the grandparents have very little cash or residue in their estate. This is the personal wealth bubble discussion which I have written about. When you have personal financial liquidity or what Derryn Shrosbee calls the “farm liquidity solution,” you have tools to cascade wealth without chopping off land.
Remarriage
There’s great fear of divorce and more hands expecting wealth. Here’s the young farmer text: “What happens when you have an uncle who remarried and wants his new kids to get all the family legacy?”
Folks don’t usually want to talk about inter-spousal agreements to protect the farm business. I do have a client family who wanted to set the example as founders, so they did go out to get a marriage contract done, even though they have been married for over 30 years.
No one wants divorce. Divorce on farms happens. It is a huge source of ongoing conflict and pain, so what are you doing to cherish and protect your marriage? What are you doing to protect your farm business from divorce? If business partners are getting remarried, you need open, honest communication with a well-understood operating agreement and/or shareholder document.
What is the story your parents are really telling themselves?
Here’s the young farmer text: “I keep bringing up succession to Mom and Dad. They keep saying ‘We don’t know what we want’ and divert the conversation. Now I just sound like the greedy one!”
I said: “Change the story you are telling yourself. You need certainty.”
This young farmer has parents who are not skilled nor prepared to talk about tough issues. Many of you cannot do this crucial conversation work alone, yet you are not willing to ask for professional guidance and help.
“Being clear is kind,” says social researcher Brene Brown, and this is the quote deemed most helpful to a seminar I presented to South Dakota ranchers. The light went on for them as they realized they no longer have the luxury of avoiding hard conversations. My t-shirt says, “Love does not read minds.”
It is time to stop guessing what everyone thinks, feels, wants and needs. Explore what stories your grandparents, parents and siblings are telling themselves about the future and transition of wealth on your farm. Ask Grandpa or Mom, “I’m just curious, what is the story you are telling yourself? Is this a scarcity mindset issue? How much is enough? Would you ask for the help of a financial planner to give you more financial security and certainty for your income streams as you age in place on this farm?”
Large families with multitudes of expectations need professional facilitation
“How much money do we need to make sure Mom and Dad are getting every year? How do you have a civil conversation with 13 immediate family members?” another text says.
The best way to deal with complexity is to break things down and start with each couple or family unit, then work toward the group meeting. In our coaching process we do confidential coaching of each family with the goal of giving them clarity of expectations, and positive conflict language to prepare each person with skills to be able to ask graciously and respectfully for what they need, and to share their vision of the future of the family and the farm.
The Conflict Dynamic Profile tool is very helpful to get folks to see sharing emotions, creating solutions, and gaining the other person’s perspective are positive behaviours to help everyone find common interests.
Review and answer these questions:
- What do I know?
- What do I need to know (and who can help answer it)?
- What do I want?
- What do I not want?
- What do we agree on?
- What could I “live with” or seek to get, win/win?
- What is the worst that could happen if…?
- How can I prevent the transition from going wrong? How can we get more alignment of expectations?
- What is the best that could happen if we reached out for help, shared honestly and created solutions together?
