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Build a Successful Multigenerational Farm
Through a Team Approach
Strengthen your farm with financial communication.
The dream for many farmers is to create a legacy: a family business that can continue to prosper after they are gone. But like farming itself, this is more easily said than done. To increase the chances that your farm will be part of your family’s future, embrace communication today, discussing not only the day-to-day business of running the farm but also the larger, long-term concerns involving succession, ownership and financial compensation. These aren’t easy conversations to have, but they can help ensure the ongoing success of your farm. Here’s what you need to know.
- Talk early and often — before there is a crisis. “It should start with the husband and wife,” says Marsha Goetting, professor and family economics specialist at Montana State University. As soon as children are in the picture, start discussing the long-term future of your farm, and be sure to continue that conversation, because factors will change. Some children will leave the farm. But what are their expectations for the long haul of life? “It has to be an ongoing ‘what if,’” Goetting suggests. “What if three of your children want to come back [to live and work on the farm]? Will the place support three additional individuals? Or are you having a hard time making ends meet right now?” Have a clear idea of what you and your family want before it becomes a dispute.
- Involve the younger generation. “Even children of high-school age can be involved in decisions about the farm’s future,” Goetting says. By beginning discussions early, you can get a sense of which children are interested in being a part of the farm, although of course choices will change over time. “As a parent, you may not know that your child is interested and willing to make the sacrifice to be a part of the ranch,” Goetting notes. “Or maybe you need to make it clear, ‘Hey, this place isn’t going to be big enough for any of you. You all need to come up with a career. I want you to go to college and see what you can do.’”
- Take the tension out. If these types of conversations are tough for your family, consider bringing in a neutral party as a facilitator — or taking the discussion somewhere else where everyone can be more relaxed to discuss farm issues. “I know one family who meets at a vacation spot, and that way everybody has a chance to get away,” Goetting says.
- Cover the big questions. Goetting says key topics for discussion are ownership, succession and plans for legal incapacitation in cases of disability or other physical and mental faculty loss. Melissa O’Rourke, a farm and agribusiness management specialist at Iowa State University, notes that decision-making, compensation and retirement are also key subjects.
But beyond any specifics, what’s most important is that you make sure a discussion happens. “You have to talk about it,” says Goetting. “Talking about it helps us mentally sort out these things.” It will help keep you on track to securing the farm’s future, she suggests.
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The article(s) you are reading were prepared for general information purposes by Manifest, LLC. These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions. These articles may provide reference to Internet sites as a convenience to our readers. While PNC endeavors to provide resources that are reputable and safe, we cannot be held responsible for the information, products, or services obtained on such sites and will not be liable for any damages arising from your access to such sites. The content, accuracy, opinions expressed, and links provided by these resources are not investigated, verified, monitored or endorsed by PNC.
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