In an ideal world, the family farm would be passed down from generation to generation without any issues. The reality is that family farm succession success requires careful consideration and planning for the process to work well. Successful multigenerational farm families all need to work through the following.
Open lines of communication. Hold regular family meetings and put all the issues on the table. This includes farm information and concerns as well as challenges with one another. Deal with problems on a regular basis and take the time to listen to avoid major problems.
Build with the future in mind. When making decisions about the family farm, think of the next generation. Instead of selling shares in the farm operation, consider gifting shares to the next generation. A feeling of belonging is created when younger generations are brought into the partnership early.
Establish clear partnerships. Tax and business laws are continually changing, so it is important to research and make a clear plan for future generations. Consider writing up a formal plan to outline how disputes are handled, profits are dispersed, and the future is envisioned. Even if this document is never needed, it can be a solid way to think through the current roles of your family and set a plan in place for the future.
At the core of all of this preparation and planning is the need to work through family dynamics for a successful family farm succession. Contact us for more tips on running the family farm.