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Make Way for the Next Generation

July 6, 2011
By: Kevin Spafford, Farm Journal Columnist
 
 

Joe is the middle son in a successful farm family. He works with his father and older brother. He has an inactive younger brother who lives in another town. Recently, Joe’s son expressed interest in returning to the family farm. Since earning his degree in agriculture, he’s gained three years’ experience in off-farm employment.

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Though Joe and his brother have worked with their father forever, Dad still owns 100% of the operation and makes most of the farming decisions. The decision for Joe’s son to come home is based on the family implementing a succession plan, but they’ve never had a conversation about it.

Joe is hesitant to broach the subject for several reasons:

  1. His older brother has been working on the farm since high school. Dad insists he is entitled to fair treatment, though everyone knows he doesn’t work as hard as Joe.
  2. Dad was recently diagnosed with Alzheimer’s disease.
  3. Joe’s younger, inactive brother advocates for inclusion.
  4. Dad remarried when Joe was a teenager, and Joe and his stepmother don’t get along.
  5. The older brother is remarried for the third time; his wife is a real estate agent.


When Joe’s family came in for an initial consultation, we began with an explanation of succession planning and reviewed our process. Just as we were about to share a time line for the succession planning process, Becky, Joe’s wife, slapped her hand on the table and said, "I’ve been waiting 33 years for these boys to have this conversation." "These boys" are her 55-year-old husband, 53-year-old inactive brother-in-law, 57-year-old active brother-in-law and 83-year-old father-in-law.

Succession solutions. In the meetings that followed, we helped Joe’s family wrestle with the succession planning puzzle. We created solutions that addressed their goals and dreams. When all was said and done, Joe’s older brother wanted to retire. So we created a retirement package that satisfied his needs and compensated him for his commitment, yet did not unduly obligate the operation.

After some discussion, Joe’s younger brother accepted an undivided minority interest in the land. The farm operation was secured with a long-term lease on the property, and the family has completed a buy-sell agreement.

Dad is still as involved in the farm operation as much as is practical, but the primary ownership and farm management decisions are now Joe’s responsibility.

Joe’s son is now actively involved in the farm operation, gaining experience and developing his leadership skills for the next generation of family ownership.
 

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FEATURED IN: Legacy Project - Legacy Project 2011 Report

 
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