Fair vs. Equal Conundrum

February 17, 2010 02:31 PM

Q I was overwhelmed and overjoyed when I saw the Legacy Project Survey in the November issue of Farm Journal. My family has a large dairy, and for years my dad has preached succession planning concepts to his kids. My father-in-law, a profitable grain and cattle producer, has no desire to discuss daily plans, future plans or any plans. 

Of four children, my 37-year-old husband is the only child who works on the farm. He has no idea what would happen if his father passed away tomorrow. Last summer, I encouraged his family to have a "family meeting.” We met with my in-laws and the situation went sour. No one had ever asked the tough questions, and they liked it that way. Now I'm the "greedy” daughter-in-law.

Greed has nothing to do with our issues. We'd like to have some security and stability. I'm well-educated, and I have a major role in my family's farm operation. I'm not looking for another farm to manage or for money. I just want clarity, communication and a plan for our future.

A You echo the sentiments of every son and daughter who works on the family farm. Your husband must be informed and involved in the decision-making process for the longevity of his livelihood and the farm.

Symbolically standing next to your husband is important, but he should ask the questions. A daughter-in-law posing difficult questions and asking about sensitive financial matters is almost always going to be misunderstood—and most certainly be put in a tough position.

Adult children working on the family operation have a right to know. Unfortunately, by nature most farm owners are resistant to discussing personal, private and parental matters. At a young age, kids are taught that it's impolite to ask about income or financial issues. In some families, questions regarding inheritance or estate distributions are considered disrespectful and inappropriate.

In our client consultations, we encourage transparency—clear communication for all parties. Although I don't condone meddling in the affairs of others, I do believe the corporate world offers an excellent model for informing employees. Human resource departments, for example, notify employees about wages, bonuses, benefits, promotions and retirement options. In turn, employees can make educated decisions that may affect the long-term stability of their occupation.

Yes, I know, a human resource department for a family farm is unlikely—but the concept is what's important.

Adult children who work on the family farm sometimes work for less than the prevailing wage. They may be subject to seasonal pay variations and minimal fringe benefits. Discussions, or lack thereof, regarding wages and benefits are only symptoms of poor communication.

That said, how should a son or daughter who works on the family farm approach the sensitive subjects associated with security and stability and build a channel for better two-way communication? A good starting point includes:

  • A clearly defined objective. Whether it's a formal meeting, casual conversation, instructions for the day or a new approach, every interaction between two or more people should be shaped by a goal.
  • Involve all (but only) active family members. Farm business is business; this is not an occasion for the distraction of outside opinions and off-farm advice. Family members actively involved in the operation have a right to know and should expect an uninhibited conversation with the managing generation.
  • Put together an agenda for each meeting. A point-by-point discussion ensures that all important topics are covered and that each person is able to weigh in with his or her concerns.
  • Try to never personalize the issues you are discussing. Communication is not an us-versus-them affair.
  • Seek common ground; it is much easier to start from common interests and seek mutual benefits than to start from the edges of disagreement and then compromise.
  • Every meeting should end with an action plan detailing the next steps, who's responsible and when.
  • Follow up to ensure participation, accountability and sincerity.

The goal is always to foster a win-win situation. Good communication will enhance operational integrity, improve family relationships and ensure that each person gains a sense of security and stability. 

Kevin Spafford is a certified financial planner whose firm guides farmers and agribusiness owners through the succession planning process. He is the author of Legacy by Design: Succession Planning for Agribusiness Owners. To pose questions and comments, contact Legacy by Design, 2550 Lakewest Drive, Suite 10, Chico, CA 95928, (877) 523-7411 or legacyproject@farmjournal.com.

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