Are your relatives still talking to your farm parents? Has a broken branch of your family tree been severed forever due to estrangement or land ownership friction?
The book “Fault Lines: Fractured Families and How to Mend Them” gives an understanding of how families end up in the painful experience of “not talking”. Author Karl Pillemer says key reasons are money and inheritance. There are volcanic experiences over wills or unfair distributions of wealth. There are also unmet expectations over violating norms of expected family behaviour. Some next generation farmers come across as very entitled.
We mix expectations about money. What money means to people is different. Then we add the business need for the farmland to stay intact while using poor communication or conflict avoidance. This is how the volcano blows up.
Fairness for both farm and non-farm heirs is helping everyone in the family be successful. The degree of wealth for the parents and the children will likely be different.
What if you have always been wealthier than your farming parents? These folks just want mom and dad to enjoy the fruits of their labour and have a decent life as they age in place on the farm or move to a great lifestyle.
The folks who are not happy about the plan for the land to stay intact with the farming heirs feel they are not “worth anything” because the story they are telling themselves is “money equals love.” The unhappy heirs may also be hanging on to financial promises made to them by one parent without the knowledge of the other.
Let’s change the script.
Let’s ask the non-farm heirs what they expect from the farm wealth and why — Managing expectations means getting folks to express their thoughts on paper or verbally so you can manage assumptions. Are you willing to be financially transparent with your children to be clear about the amount of wealth that is available for transfer? Working ahead of this conversation may involve a coach or financial planner who can facilitate your family meeting to ensure it’s safe and respectful. An adviser holds an inside track because they are aware of the heir’s expectations and parents due to the pre-meeting confidential coaching sessions.
Merle Good suggests a long-term rental agreement for the farming heir to rent a certain portion of land from a non-farm heir, and in 15 years the farmer has first right of refusal to buy the land. Farms need access to land. Unfortunately, many farmers do not want to be in business with their non-farm siblings.
Some children are single and need to create wealth on their own. These siblings are often seen as “needing more” than those with partners as two income families.
I am a big advocate of gifts with a warm hand, not a cold one. When parents are very open about the gifts to all the heirs, there’s room for appreciation, gratitude, and a positive attitude. Who’s going to help you deal with the emotional factors affecting planning, and help you decide which expectations of wealth transfer are workable? It’s wise to have a group family meeting with the financial planner, accountant, and lawyer present to help explain why mom and dad are making plans for wealth transfer.
If you are stubborn, hurt, and emotionally torn, choosing to stay away from the family meetings, then you have chosen not to have vital input into decision-making. You have a consequence for your stonewalling, you get left out of understanding the intent of the benefactors. Choosing not to talk or giving your family the silent treatment is a decision with painful consequences, as you don’t get input in the wealth transfer decision process.
Another key issue is embarrassment. Seventy-year-old farmers may be humiliated and embarrassed they haven’t managed cash flow well or fallen on hard times, not paying attention to building their personal wealth beyond the farm.
Who’s asking the farming child to take on debt to help finance some lifestyle income for the parents? Successors who think they should be “given everything” really flame the fires of conflict with siblings who don’t know the innate details of low wages, delayed compensation, and other transfers of money between parents and farm heirs. You can clear this up quickly with open, respectful communication.
How do you get your non-farm siblings on board with the farm vision?
- Treat the farm like a business and be transparent with finances, cash flow, debt, and who’s expected to play a role in the business long term.
- Share your wealth transfer intentions with all family members. Ask them “What does fairness look like to you?” You may disagree, yet you can explain your perspective and seek to understand what heirs are needing and wanting. Parents aren’t responsible for making all their children economically equal.
- Don’t hide behind your advisors and say, “The accountant or lawyer will just tell me what to do!” Be very curious with everyone and ask probing questions to drill down on expectations. Let folks know what is reasonable and workable.
- Hire a financial planner to be clear about what you need for income streams for the next three decades.
- Share your business vision and dreams for the farm. Ask all the family members what kind of relationship they would like to have with the farm’s activities.
- Hire a coach to help you navigate conflict, resolve issues, and create healthy workable communication for family harmony through understanding.
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