Imagine how wonderful life would be on your farm if you did not have to guess what other people on your farm team really wanted for their lives and for the farm business? I had the great joy of speaking to 540 young Iowa farmers recently. Many of them are stuck trying to get equity in transition due to U.S. tax laws that incentivize holding on to land and assets until the death of the grandparents or parents. I suspect you have your own story of curiosity as to why you are not able to get what you really want (power and control of the farm management, equity to grow and service debt, new housing, a peaceful workplace, etc.).
Start by asking yourself these questions.
- What do you truly want for the next chapter of your life on the farm?
- Why is this such a hard topic to openly communicate with your family?
- When are you going to make your lifestyle desires and farm business vision known?
Please go back and read those three questions again. The farm founders and successors both need clarity of expectations. Here’s a question asked by a young Iowa farmer who speaks for many young people who are anxious about the uncertainty of their future.
“What are the best ways to deal with off-farm siblings that haven’t shown interest in the past or put any work into the operation, but now all of a sudden want a piece of the pie?”
My answer to this farmer was to “have a coaching session with third-party facilitation. Keep it safe and respectful.”
Most people want their family to get along, to have a profitable farm and to not break off land to non-farm heirs. Your family may have a culture of “Grandma has four kids, so each kid will get a quarter of the land.” This is creating great havoc and stress for those who cannot see another solution.
- Where is it written that all adult children need to get land? Are there other assets like non-farm property, cash, insurance, investments, diamond rings, vehicles, art, oak desks, etc., that can be passed on? The issue here is the grandparents have very little cash in their estate. This is the personal wealth bubble discussion which I have written about. When you have personal financial liquidity, or what Derryn Shrosbee of 33Seven calls the “farm liquidity solution,” you have tools to cascade wealth without chopping off land.
- Remarriage. There’s great fear of divorce and more hands expecting wealth. A young farmer asked, “What happens when you have an uncle who remarried and wants his new kids to get all the family legacy?” People don’t usually want to talk about interspousal agreements to protect the farm business. I have a client family who wanted to set the example as founders, so they did go out to get a marriage contract done even though they have been married for over 30 years. No one wants divorce. Divorce on farms happens. It is a huge source of ongoing conflict and pain, so what are you doing to cherish and protect your marriage? What are you doing to protect your farm business from divorce? If business partners are getting remarried, you need open honest communication with a well-understood operating agreement and/or shareholder document.
- What is the story your parents are really telling themselves? A young farmer said, “I keep bringing up succession to Mom and Dad. They keep saying, ‘We don’t know what we want’ and divert the conversation. Now I just sound like the greedy one!”
I said, “Change the story you are telling yourself. You need certainty.”
This young farmer has parents who are not skilled nor prepared to talk about tough issues. Many of you cannot do this crucial conversation work alone, yet you are not willing to ask for professional guidance and help. Social researcher Brene Brown says, “Being clear is kind,” and this is the quote deemed most helpful during a seminar I presented to South Dakota ranchers. The light went on for them as they realized they no longer have the luxury of avoiding hard conversations. My T-shirt says “Love does not read minds.”
It is time to stop guessing what everyone thinks, feels, wants and needs. Explore what stories your grandparents, parents and siblings are telling themselves about the future and transition of wealth on your farm. Ask Grandpa or Mom, “I’m just curious, what is the story you are telling yourself? Is this a scarcity mindset issue? How much is enough? Would you ask for the help of a financial planner to give you more financial security and certainty for your income streams as you age in place on this farm?”
- Large families with multitudes of expectations need professional facilitation. “How much money do we need to make sure Mom and Dad are getting every year? How do you have a civil conversation with 13 immediate family members?” another young farmer asked. The best way to deal with complexity is to break things down and start with each couple or family unit, then work toward the group meeting. In our coaching process, we do confidential coaching of each family with the goal of giving them clarity of expectations, and positive conflict language to prepare each person with skills to be able to ask graciously and respectfully for what they need, and to share their vision of the future of the family and the farm. Sharing emotions, creating solutions and gaining the other person’s perspective are positive behaviours to help everyone find common interests.
Review and answer these questions.
- What I know?
- What I need to know (and who can help answer it?)?
- What I want?
- What I do not want?
- What we do agree on?
- What I could “live with” or seek to get win/win?
- What is the worst that could happen if _____ happens?
- How can I prevent the transition from going wrong? How can we get more alignment of expectations?
- What is the best that could happen if we reached out for help, shared honestly and created solutions together?
