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Don't Start a Farm Family Feud

Don't Start a Farm Family Feud
Follow these key points to build good will with your estate plan

I have a 75-year-old client who gets worked up just by mentioning how the home farm was divided among her siblings when her parents died 25 years ago. The three girls got even shares of two-thirds of the land and the one boy got the remaining third. (He is a male, after all.)

I know clients who are siblings and no longer speak as a result of a dispute over dad's bottle of Johnny Walker scotch.

I know clients who could not agree on how to split up the parents household effects and ended up cutting cards for each item in the house.

Some of the emotion and conflict is only natural. The death of a loved one is always a stressful time, but proper planning can reduce the potential for conflict.

Legacy planning is a process, not an event. By reviewing legacy plans over time, adjustments can be made to embrace new situations or changing priorities.

To avoid these issues, start with this premise: legacy planning is a process, not an event. By reviewing legacy plans over time, adjustments can be made to embrace new situations or changing priorities.

Related: Transferring the Farm: Are You Ready?

If you are serious about avoiding the family feud, forget about being fair.

If there is more than one heir for the family agricultural business and not all of the heirs are interested in staying involved with the business, the situation will never be "fair." The heir with an interest in the forward-going business has more at stake than the heir who just wants their share and then wants to leave.

Here are just two ideas on how this could be done:

• If you want to protect the family legacy business, then make choices to protect the health of the business first; then distribute a "fair share" to the heirs second.

• If the priority is to distribute an equal value to each heir in the estate, perhaps life insurance should be used to create additional cash in the estate that can be used to "cash out" the non-participating heirs.

Talk Early, Talk Often
Don't wait for the matriarch or patriarch to pass away to begin to talk about the plan. The more you talk now, the better things will go in the future.

Gather all the heirs into a family meeting. Lay out the goals of the legacy plan. Explain the rationale for the choices that are made and tell them all how you want it to be. It's better for everyone to hear things first hand and at the same time so there is less confusion.

Then every year, maybe at holiday time when the family is gathered together, review the game plan and pass along any updates.

No plan is perfect, but communication now is key to avoiding feuds later.

The opinions of Rich Dunn are not necessarily those of Farm Futures or the Penton Farm Progress Group.

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