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Lean into the succession talk with your kids

Getty/iStockphoto Man is writing succession planning in the book.
How to talk to the next generation about taking over the farm.

This past week, I spent a lot of time at Iowa State University talking with soon-to-be accountants about farming. We hire a lot of students and graduates to help our firm grow, distribute our workloads, and make us feel old as we prepare them to take over as leaders in the firm.  

Since these same things all happen on the farm (and is on my mind right now), I want to discuss some of the things you should consider when bringing in your next generation. For a good portion of you this will be your children taking over your farm.

Discussing the farm transition with your kids will:

  • Give them history of the family farm and provide context for “why”
  • Help you gauge interest, intent, and ability for them to come back
  • Help them make decisions for the direction of their own life
  • Remove uncertainty as to the wishes and best interest of everyone

Timing for conversations about transitioning the farm is important. You are the best person – as their parent and prospective employer – to determine if and when you think your kids are ready to have that conversation.

Sometimes it’s a hard subject to get into for many reasons, but you have to lean into it. I have been involved with operations where the conversations never happened before the patriarch passed away, and it created a lot of hardship on the surviving family.

Once won’t be enough for these conversations. Life will happen for your kids, the same as it did for you.  Life events (marriages, children, deaths) may change their priorities and expectations for their own lives, so you will need to check-in with them to make sure you are all on the same page. These changes may take a current on-farm child off the farm and vice versa.

Share your finances

Consider talking to you kids about the financial aspects of the farm. Trust me when I say you won’t be doing your family any favors if you try to bring three kids back to the farm but the business only has enough income to support two.

Talking about money is hard for most families, but there are financial barriers involved in coming back to the farm, and it may be a family decision to rescale the farming operation.

Learn what they love

Some of you may have kids who are more interested in numbers and analysis than tractors and planting; and having expertise in both will give your operation a competitive advantage. It’s well accepted that not everyone who starts at a CPA firm wants to be a partner, and some come in so they can get some experience to prepare themselves to go back to their family business. We have a place at our firms to help those financial farmers-in-training.

If you have a child who may be interested in the financial, tax, and/or accounting side of farming, ask your CPA if they would mind talking with them.

The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 

 

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