Most business owners have some plans and documents in place to guide the future of their farm business.
At minimum, they have a basic will and, increasingly, founders have specific plans to equip the successor to gradually take over the management and assets of the enterprise. It is complex to navigate and anticipate all the details of farm succession and estate planning, so most businesspeople aren’t looking for even more tasks or tough conversations.
So, talking to your non-farming heirs about your transition and estate plans might sound like a great way to create unnecessary stress. However, it’s almost guaranteed that non-business family members have feelings or expectations about the farm, whether you ask them or not. There is great value in purposely initiating conversations with all heirs to proactively level-set the understanding for everyone.
Many people subscribe to the belief of “it’s none of their business.” In North American culture, the example that has been set in families is that wills are secret, only to be read in the lawyer’s office once the person has died. What has driven this behaviour?
Well, it’s easier to avoid the conversation, especially if you are a private person and are afraid of objections to instructions in the will. The problem with this approach is that if there are any questions or unclear directions, the person cannot be consulted — they are dead, after all — which leaves heirs to navigate the realizations, complex transactions and decisions in a time of grief.
In the absence of a clear explanation, people tend to view their inheritance as a measure of how much their parents loved them.
Not sharing the details of your succession and estate plans with your heirs only leaves a gap of information that they are likely to fill in themselves with inaccurate assumptions. In the absence of truth, humans tend to “make it up,” which frequently results in doing harm to family relationships.
This is where you hear comments such as “they got the farm for free,” negating the years of unpaid work or personal sacrifices that can be a successor’s reality. Unspoken, undocumented promises and efforts are dangerous territory if other family members aren’t brought into the circle of understanding.
With that in mind, consider this: if you were to explain the intentions of your transition and estate plan to all your heirs, what could that sound like?
First — a few ground rules should be clearly stated by the parent to each heir, in preparation for a one-on-one conversation.
For example, “I am not giving you authority over my business or estate, but I care to hear your perspective and expectations.”
Second — there are three key questions worth exploring with each heir (taken from The Future Leader appendix “Scripts to build on”):
- Do you have any expectations for your inheritance from me?
- Are there specific items that are meaningful to you that you would like to inherit?
- (Successor’s name) has committed to being the operating successor for our family business. How do you feel about that? The business assets (e.g., real estate/equipment) are valuable but are not cash. They are necessary for operating the business. The business also has a high level of risk. To be successful in business, (successor’s name) will need access to those assets that are tools of the business. How do you feel about them purchasing and/or inheriting business assets?
(Note: This series of questions is worth revisiting with your heirs every year or two as needs, families, careers and abilities shift and responses shift accordingly.)
If the heir’s responses (whether they are farming or non-farming siblings) are unreasonable, the parent has an opportunity to correct the expectation.
Sometimes, an heir expects too much or too little. Either way, you are level-setting the understanding for the family to navigate in your absence.
The heir may disagree with your choice, which creates space for you to explain, reflect and consider their perspective. Once again, you are not giving them authority over your intentions but purposely listening to their perspective.
- WATCH MORE: Tricky convos ahead? Check out Patti’s AwkwardAg series about those difficult farm family conversations.
Responses to the second question above are often a surprise as items that are small or insignificant to the parent might be deeply meaningful to their heir. Examples from families who have used this script include: a request for grandma’s tea set; dad’s old cribbage board; the five-acre wooded area on the home quarter where the kids played as they grew up.
Most impactfully, these questions challenge the heirs to put themselves in the parents’ shoes. Decisions about business transition and estate often feel difficult as an owner is simultaneously trying to balance business stability and continuity while providing an inheritance that feels reasonable to each heir.
This is also where “fair” and “equal” get brought up. The problem? “Fair” is a personal opinion and “equal” is short-term in a changing world. Using those as measuring sticks for inheritance outcomes creates impossible expectations.
By starting and repeating this conversation over time, each of your heirs will know what to expect and hear your point of view — which is a valuable inheritance in itself.
