Ontario lawyer Sarah Jacob shared her experiences at a Canadian Association of Farm Advisors (CAFA) update. Here are her tips to save time and money when working with your lawyer.
- One of the great difficulties facing farm families is the assumptions made about what everyone wants and needs. Jacob encouraged clear communication to alleviate unexpected conflicting desires, needs and expectations. What does each person want?
- Have you been open with the next generation about finances and your plans? Jacob said that is likely not the case.
- Do you have life insurance? What kind and what are the payout terms? Farmers don’t like to waste money, but Jacob said she believes, as I do, that life insurance can solve many problems with cash flow and with estate planning to deal with fairness to non-farm heirs.
- Have you thought about your children’s interest or commitment to farming? What is your deadline for a response of dedication to coming back to the farm? For us, we told our son we needed to know by the time he was 27 if he was committed to partnering with us.
- Do you foresee conflict amongst the generations or siblings? How are you prepared to deal with this?
- What inheritance obligations have you signed up for? Jacob would like knowing what promises parents have made to any adult children. Promises create resentment and a sense of entitlement.
- What do you owe your “ex”? Jacob mentioned that people tend to forget past painful contracts and commitments such as life insurance benefits going to an ex-wife.
- “Decline is not fine,” Jacob said as she reflected on the fact that many people have a widespread reluctance to engage in planning for transition because of existing or inevitable decline.
We all need to face the fact that planning helps decrease future conflict, makes us more tax-efficient and decreases the stress of “not knowing.”
- Do you have a favourite child? Jacob said she thinks most parents do. How does this bias your planning or keep you avoiding conflict?
- How much do your children’s opinions matter to you as parents? Some people take an insular approach and make decisions as a couple, while other families want to have a clear understanding of the opinions of the entire family.
As a farm family coach, I think you’ll have great success when you are clear about your needs and wants as a couple and also survey the needs and wants of your adult children. No secrets and no surprises is a great way to have better transparency for great planning.
- Do you have a clear picture of everything you own? Farm assets may be in a neat inventory list, but what about the cottage, boat, non-farm real estate, financial portfolio and shares in other ventures?
Be very clear about your net worth statement, and remember to include all your non-farm assets. Review your asset base and refresh the whole family’s memory.
Some of Jacob’s strategies may be hard for you to swallow, but consider:
- Get life insurance when you are young and premiums are more reasonable.
- Look at the value of non-farm assets.
- Accept that various inheritances will not be financially equal, and remember to honour your promises for time and effort.
- Talk to your children.
- Ask better questions, and don’t assume. You don’t know until you ask.
Find your will and call your lawyer for an update. Make sure you have an alternate for your power of attorney now that your adult children are farming with you. We have our son as an alternate in case we are incapacitated in a car accident together as a couple.
Feel less stressed knowing you are taking steps to get your affairs in order. Have a family meeting to scout out the expectations of all of your adult heirs and hear their perspectives alongside their spouses.
When you all meet in the same room together at the same time, there is nothing lost in translation.
Lawyers are professionals with a great deal of experience and wisdom. They have seen many successful scenarios for planning and can help you create a great plan for transition that meets your unique needs.
Lawyers cannot read minds, so you need to be prepared when you meet with them with the best awareness of all the needs, wants and assets clearly outlined.
Do your homework long before you meet in the lawyer’s office, and save time, money and frustration by being well prepared to address your unique circumstances.
If you are fearful of costs, ask for a quote or range of fees for services. Be clear about the timelines for the preparation of documents. Good communication with your professionals is a two-way street.
Ask for clarification if you really don’t understand what your lawyer is telling you. There is no such thing as a dumb question; just ask them to explain things in a different way.
When you find a great lawyer who communicates clearly, tell your farming friends. The lawyers who are part of CAFA (www.cafanet.com) have a passion to serve farm families well.
Don’t procrastinate. “You cannot start planning too soon,” Jacob said. If you are in a second marriage, get independent legal advice and use pre-nuptial agreements.
Remember, you get to share with your advisers “what you think you would like,” and you need to know what that is before you visit the lawyer’s office. 
Elaine Froese respects lawyers who are timely, use clear language and are willing to be part of family meetings with her. Visit Elaine Froese to share your referrals to great ag lawyers.
Illustration: Illustration by Thinkstock.
