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Leave a Legacy

RSS By: Kevin Spafford, Legacy Project

Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project.  He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.

Formality is Better for Family

Nov 13, 2013

Signing Document   MicrosoftFrom Legacy Moment (11.08.2013).
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An article begins "... dealing with relatives can be one of the hardest issues to address as it relates to farm leases." It goes on to explain, "... with good communication and a written lease agreement, you can set up relationships that are not hard on the family."

It doesn't get any more basic than that. We struggle with formality. The farming culture is proud of its "handshake leases" and "my word is my bond" agreements. But those are vague and unclear ideas when scrutinized against what was actually said and what was heard.

The article, "Communication Key to Farm Leases" by Allan Vyhnalek, an Extension educator at the University of Nebraska-Lincoln, is full of basic wisdom. Vyhnalek has no doubt refereed a few disagreements during his career. His advice can be summarized as follows:

  • All leases should be in writing, whether between related or unrelated parties.
  • Acknowledge the actual cost of landownership.
  • Define who (landlord/tenant) pays for what level of maintenance.
  • Charge and pay a fair rent, though in some circumstances, that might be less than market.
  • Openly share information—yields, costs, maintenance needs, etc.
     

Through the course of the Legacy Project, I've encouraged more formal structures in all business matters. Things such as operating agreements, land leases, job descriptions and family employment policies encourage families to separate business concerns from family matters.

What have you done to better manage the demands of the business and the needs of the family? Let me know at Ask Kevin.

(By the way, it was a pleasure to hear from so many daughters and daughters-in-law last week about your experiences on the family farm. I'll be addressing the topic again in the near future. Thank you!)

News & Resources for You: 

Communication Key to Family Farm Leases by Allan Vyhnalek for Columbus Telegram (11/04/2013).

Help to ensure the legacy of your family farm. Register for a Legacy Project Workshop in Lincoln, Neb.; Peoria, Ill.; or Indianapolis, Ind.

Ready to get started at your own pace today? Visit eLegacyConnect.com. 

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