Unfortunately, the early October rain pushed back the start of harvest that is already behind schedule.
There is no doubt harvest is busy, with little time for anything extra. However, while in the combine, grain cart or grain line, I would encourage you to contemplate the communication of your estate and farm transition plans to the rest of your family.
Of course, this assumes you have a plan to communicate. For now, let’s assume you have adequately considered and maybe even reconsidered your options, not only for your estate plan, but also for your land and operating asset transition plans (it is possible to have three distinctly separate plans).
How have you communicated your estate and farm transition plan to the next generation?
Method of communication
1. Discuss your plans individually with your children.
This is not without flaws, but it can be effective for some families. It opens the communication process and can be beneficial to bounce ideas off your children in preparation of a future family meeting.
This may be a good option if scheduling conflicts make it difficult to get everyone together or if you know for certain that a family meeting will cause intolerable conflict.
2. Forward past meeting correspondence with your attorney, accountant and financial advisors to keep your heirs in the loop.
This is another supplemental strategy that may be best in combination with a family meeting. This method can be a good way to break the ice if you don’t know what to say or how to say it.
An earnest attempt to communicate is what is important with this strategy, and your children may respond with appreciation. No matter what camp they may be in, most heirs do not know what to expect and they don’t know how to ask. Any attempt at guidance on what to expect is a step in the right direction.
3. Writing a personal letter to your children is a good way to tell your kids about your estate plan if you can’t (or won’t) tell them in person.
This letter is best handwritten and should clearly explain the “why” of your plan (not necessarily the “what”). An estate plan can impersonally explain the “what” but not necessarily the “why”.
Most of the time, a hand-written letter is designed to be opened after death as a way to stave off the possibility of heirs getting upset with their share of the inheritance.
Over the years, we have encouraged many families to write a letter to their children. These families, for one reason or the other, were not willing or able to discuss their plans openly.
4. Let your heirs find out about your estate plan at the time of your death through the “reading of your will.”
This lack of communication creates the most potential for conflict. The “reading of the will” is an emotional time that can exacerbate potential issues by placing emphasis on the “what” of the estate plan.
Consider a “reading of the will” meeting with your family before your death. It can give you a chance for a “do-over” if needed.
5. Schedule a family meeting.
This is by far the preferred method of my clients. It is best not to schedule it at Easter or Christmas, or over a family wedding weekend. It is best at a neutral location to encourage a business environment and to stay on track.
You may need to schedule a family meeting as much as six months in advance so you can make other arrangements (phone or video conference) for members who may not be able to attend.
I believe it is best to have the in-laws attend this meeting as well as your children. A nice lady recently approached me after a panel discussion on this topic and told me that her in-laws were not included in her estate plan so they didn’t need to be involved in the family meeting to communicate the plan.
I politely acknowledged that in-laws typically aren’t involved in the estate plan, but that didn’t mean the in-laws shouldn’t have an opportunity to listen to Mom and Dad tell the kids (and their spouses) in person the “why” of their plan.
The situation is always the boss. If you have an in-law who is disruptive and disrespectful, then maybe they should not be in attendance. The reality is the in-laws are “there” whether or not you want them to be.
If the quality of a family meeting is going to be dependent on the ability of your children to accurately regurgitate what was discussed at the meeting, you might inadvertently create a dust storm that could have been avoided. If only your children are involved in the meeting, it is human nature for the message to get distorted.
If there is going to be an issue, it’s beneficial to know what and who your family will be dealing with before it happens.
Too often heirs focus on the “what” of an estate plan and miss the rationale for the plan itself. This is the most important part of the family meeting.
Communicating the “why” is so significant that I think the family meeting should be reviewed just as often as the estate plan itself.
The outcome of a family meeting will fall into one of three categories.
1. The family will be in harmony and come away with the, “whatever you think is right, Mom and Dad” attitude.
This is obviously the best-case scenario and happens about 40% of the time in our experience.
2. The family will be in disharmony as greed rears its ugly head.
The “what’s in it for me” or “I thought you loved us all the same” attitude may prevail. This is obviously the worst-case scenario and happens about 10% of the time in our experience.
Some parents are so concerned with this possible outcome that they will refuse to have a family meeting. Most families in this category know that a fight is a real possibility and may rather defer to the future when at least they won’t have to deal with it.
3. The remaining 50% are the families that could be swayed either way.
With the right communication process, timing and patience, this category of families offer opportunity for guidance in the farm transition process.
Unfortunately with no communication or bad timing, this category of families could also be headed for transition issues.
It’s an unfortunate reality that our farming community will continue to lose (at an increasing rate) devoted land stewards who are motivated to leave their communities better than they found them.
No matter which of the three outcomes you might experience, my hope is that you will have sufficient opportunity to knowingly prepare your family for the inevitable result (positive or negative) of your plans for the next generation.
For 27 years, Steve Bohr has been a partner in the farm continuation firm of Farm Financial Strategies, Inc. For additional information on farm continuation issues or if you have a question please contact Steve via email at Bohr@FarmEstate.com or by phone at 1-800-375-4180.