Randy McKee of Estate Planning Services Inc., Rapid City, SD, has found many families don't talk about estate planning to avoid conflict or because they're afraid of losing control of their farm or ranch.

“But if we don't communicate, the first thing that usually happens is a family feud. And you'll probably produce some of those undesirable outcomes, such as inadvertent heirs, expensive legal battles or losing control to someone you don't want to have it,” he says.

McKee says many families can minimize family feuding with open communication and a well-documented business plan in place.

Better communication starts with respectful listening. “Everyone's opinion counts — especially to them,” he says.

To gather input when working with families, McKee uses a system he developed called the Family Vision Matrix^® which essentially lets every family member share their vision. For instance, how do parents envision retirement years compared to how children envision their parent's retirement years?” McKee asks. Those two answers are almost never the same.

“The point of the matrix is to uncover the issues where family members agree and where they don't, and who is being reasonable and who is not.”

But most importantly, he says, everyone has a chance to weigh in. McKee says he's had 100% participation from families he's worked with because he tells them from the beginning: “This is your one chance to be part of the solution or part of the problem.”
— Kindra Gordon

John Baker, coordinator of the National Farm Transition Network, advocates that farm transfer questions and conversations happen sooner than later. Producers between their 40s and 50s should be thinking about retirement succession plans.

“You can't transition a business in two weeks. You can sell a farm or let the business dissolve, but if you want to transition the business to the next generation, it needs to start much earlier,” he says.

Baker adds, “Succession isn't just about getting assets into the next generation's hands. Assets and the business are two different things. That's why you need to plan for that transition.”
— Kindra Gordon

Family communication can also be enhanced through written job descriptions for each person working on the farm or ranch. Sarah Fogleman, a Kansas Extension economist, says, “Whenever I find a family in conflict, writing job descriptions is the first thing I have them do. It helps them recognize that often each person has two roles: business and family. And the more we can separate business conflict from family, the better the situation will be.”

Similarly, Jolene Brown, a professional speaker on farm family communication and estate planning, advocates listing each function and entity (cattle, crop, hay, marketing, etc.) and making a chart that assigns who is responsible, who is accountable, who must be consulted with, and who must be informed.

“This clarifies roles and helps with salaries, decision making, and goal setting. It also makes it pretty evident if only one person is the decision maker for the business or if the transfer of leadership is actually taking place,” she says.
— Kindra Gordon

Directed toward the older generation in the family business, Dave Goeller, University of Nebraska Extension farm/ranch transition specialist in Lincoln, says, “You can't control the business forever. You need to take the steps to make it available to the next generation.”

Ron Hanson, University of Nebraska-Lincoln agriculture economics professor, believes the point can't be emphasized enough. He says a common perception among parents today toward their adult children is this: “You can buy the farm, but just remember I still own it.”

That's the wrong attitude. “It sends the message to children that the parents are still in charge. Passing ownership is one thing; passing control is another. There's a world of difference between the two,” he says.

That said, Jolene Brown, a professional speaker on farm-family communication and estate planning, cautions parents not to give too much to their kids. “Parents, you don't owe your kids an estate,” she says. “Take [financial] care of yourself first. Many give their kids way too much, and they expect it to be given. What you do owe your kids are a discussed, legal estate plan and tools to help them with the details after you're gone.”
— Kindra Gordon

In implementing a farm transition plan, Dave Goeller, University of Nebraska Extension farm/ranch transition specialist in Lincoln, suggests four stages — testing, commitment, establishment and withdrawal.

He calls the initial testing phase a “dating” phase. It allows for the successor(s) and current operator to try out the arrangement on a trial basis for a period of time. Usually a wage is paid.

When the testing stage is completed, it's time for the successor to decide if he or she is ready to make a commitment. Then, after another period of time, the successor will become established and the retiring generation withdraws.

Goeller says this process is flexible in how long each phase lasts and when decisions are made, but a timeline should be determined up front. He reiterates, “This is a process over time; it's not a one-day event.” But the turnover can't be too quick — or too slow.
— Kindra Gordon

• Consider holding regular family meetings that allow for problem solving, decision making and helping keep everyone informed.

• Children should never be made to feel obligated to return to the farm if their career interests or dreams lie elsewhere.

• Get professional input to legally document the estate plan in writing. Be sure to update your plan over time as situations change.

• Have an agenda established ahead of time.

• Alternate the chairperson duties so there isn't just one individual with the power.

• Be respectful toward one another.

• Use a professional facilitator if the issues are especially contentious.
  — Kindra Gordon