During the past winter, one of the farm management workshops OSU Extension conducted across Ohio was the Passing on the Family Farm series. These workshops were a way for families to grow together by developing a farm succession plan and to have crucial conversations about the farm’s future.
Each farm family is different in regard to its goals for succession planning. Family dynamics, physical resources, financial position, and managerial styles vary from operation to operation.
One of the most difficult issues is determining how to be fair to off-farm heirs without jeopardizing the future of the heirs who have remained with the family business.
Other decisions include deciding who will manage the business in the future, how to distribute assets, how and when the senior generation will retire, and how the family will deal with the unexpected.
One of the biggest mistakes is putting off these discussions until tomorrow. After all, we are going to live forever, right?
I would you encourage to make a 365-day pledge. So what is this pledge? Pledge to transfer one piece of knowledge per day to the next generation.
Think of it in the context if you were to die tomorrow, what management knowledge would your family need to know to continue to run the business at a successful level? Just imagine how better equipped your son or daughter will be a year from now if you follow this pledge.
When my dad was diagnosed with pancreatic cancer in 2010, we had only seven weeks with him before he passed away. I can tell you a lot of learning was done in those seven weeks.
Wouldn’t it be easier to teach one thing a day over a series of years? Your 365-day pledge could include lessons on financial record keeping, maintenance on equipment, tax and employee management, reading soil tests, making cropping and animal nutrition decisions, and much, much more.
A strategy to follow through with your 365-day challenge is to write your daily “lesson” on a calendar or in a journal. Have a plan and purpose for teaching the next generation.
Your 365-day pledge could also include teaching where all the property borders and underground electric, water lines, and drains are.
I found out where the underground electric line at the farm was the hard way! Yep, we hit it with a backhoe digging up a waterline. The location of this electric line was one thing I was not able to learn from my dad before he passed. After all, we never had a problem with it, so we never discussed it.
Make sure to ask your children for their opinion on the responsibilities they believe they should or shouldn’t have. What knowledge needs to be communicated for their success? Are there changes that need to be made for them to have a continuing interest in the business?
You might be surprised on the good ideas that your kids might have for you. Have you taken the time to ask them and to listen? What are you waiting for?
Help for you
For my successors, I am developing two notebooks. My estate notebook includes copies of my advanced directives, will, trust, life insurance policies, property deeds and copies of all my financial accounts.
OSU Extension has a guide, Getting Your Affairs in Order, to help you know what should be in this notebook. If you would like this PDF-writeable document, email me at email@example.com and I would be happy to send it to you.
The second notebook that I am creating is a farm resource book. This notebook includes maps, pictures, and measurements of where all the different water, electric, drainage and septic lines are. Included in this notebook are the tile maps for the farm as well as specifics on the history of the barns, farm equipment, and water wells.
While the majority of our “Passing on the Family Farm” are held during the winter, we are scheduling a few workshops for this summer across Ohio. One of regional interest will be a two-day workshop scheduled July 19 and 26 in Wooster, Ohio.
This workshop will help you get a jump start on your succession plan and learn the estate planning tools which farm families can use.
For more information about this workshop, call the Wayne County Extension office at 330-264-8722.
If you cannot make this workshop but are interested in attending future workshops, email me at firstname.lastname@example.org and I will put your name on our list to receive information about other upcoming workshops. These workshops will also be promoted at http://ohioagmanager.osu.edu.
To close today’s column, I would like to share a quote Billy Graham who stated, “The greatest legacy one can pass on to one’s children and grandchildren is not money or other material things accumulated in one’s life, but rather a legacy of character and faith.”
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