Communication in Succession and Estate Planning

There are a number of important factors that create an environment for a positive succession. A viable operation, a skilled successor who has made farming a career choice and strong family relationships all play significant roles in the successful transition of the family farm.

However, one of the most important factors is communication. Communication between spouses, generations, other stakeholders and professional advisors is critical to the succession process.

Communication with families can be a challenge. And because communication can be a challenge, it is often easier to assume that we know what other family members are feeling, what they’re thinking and even what is best for them. We’re usually wrong.

The lack of communication can be highlighted in a simple exercise. Without discussion, each family member writes down their definition of the length of time involved with the word “SOON”. The differences can be astounding and are based on each individual’s perception of the word “soon”. Perception is reality and for a smooth and successful farm transfer, family members must understand each other’s reality.

So, if parents say to the successor “We’re going to start the succession process soon” and the parent’s definition of soon is within the next few years and the successors definition is within the next few months, the groundwork for tension and misunderstanding has already been laid without anything further being said or happening.

Understanding each other’s reality can only occur through open, continuous and inclusive communication within the farm business and is a critical factor in succession planning now and for future generations. The best vehicle for communication is regular family meetings. In today’s busy world, it is also one of the hardest to co-ordinate and maintain.  Even when planned, as soon as things get busy, the family meetings may get scratched. Yet there is no other vehicle that can provide so much benefit to a family farm business. When successful multi-generational farm businesses are examined, virtually all of them utilize family meetings. It’s time well spent.

If communication is important in succession planning, it is even more important in estate planning. In order for succession planning to be successful, communication has to occur in some form. Unfortunately, communication within the family is often not present in any form in estate planning. Wills are the last communication with family – that’s it – there is no more. It can be done properly and position the family and the family business to be together for the next generation or it can rip the family apart. Again, communication is the key. The chances of the existing owners keeping everybody happy are not great, but rather than addressing it while their alive, it’s left to the survivors to sort it out. How many times have we heard “I’ll let the kids fight over it when I’m gone”. And they will fight because the parents weren’t prepared to make decisions and the family, and probably the family farm business, will suffer as a result.

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