Editor’s note: This is part to of a two-part series. Read part one here.

Now that you know who all needs to be at the table when having succession plan conversations, it is important to be prepared for the conversation.

It goes without saying that there should be important documents outlining the agreement when planning to transition the estate. However, what most people forget to check off the list when starting these conversations is to prepare emotionally and physically for this big change.

“It is very powerful, if you have not bridged that gap at all, to sit down and write a letter to the older generation explaining your desire to return to the operation and give them a moment to kind of process that on their own,” said Jessica Groskopf, a Nebraska Extension educator for agricultural economics.

Groskopf says that when the younger generation does this, it allows the retiring generation to truly understand that they are interested in coming home to the farm. This also allows the older generation to think through the expectations of the younger generation returning home, what the working dynamic would be, and what else the younger generation needs to do to show that they are prepared to take over.

How to emotionally prepare

When the next generation is ready to come home and start the estate planning process, it is important that the incoming farmer understands they are not entitled to anything. It can be easy to think that all the assets will get transferred because they are returning home. However, it is truly up to the older generation how they want to spread their inheritance.

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“Mom and Dad absolutely have the right to make whatever choice they want to make,” Groskopf said. “I am a big believer, and he who has the gold makes the rules. So, if Mom and Dad want the on-farm child to come home, and they are going to give the entire farm to them because they came home, that is their choice, if brothers and sisters know that.”

Shelby Bothun, a farm transition expert and attorney in North Dakota, agrees with Groskopf, encouraging the one taking over the farm to prepare their expectations before written communication is established.

“You need to communicate with the previous generation what you can expect,” Bothun said. “If you are giving up something, you better understand what you are giving up and that you are not guaranteed until something is in writing.”

One way that helped Billie Lentz, a fifth-generation farmer from Rolla, N.D., get in the right headspace was advice given to her by her dad.

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“It will likely get emotional, and that is OK — grant yourself permission to feel those things, but at the end of the day, lay the ground rule that this is a business and not a determining factor of your family and relationships,” Lentz said. “We are trying to allow a business to carry on here, and what do we need to do to ensure that this business can prosper?”

How to physically prepare

Bothun warns the next generation that an oral agreement of inheritance of assets is not enough to go off when planning. She recommends everyone write down what is getting transferred to each stakeholder.

LOOKING FORWARD: Successful succession plans must include a written way to guarantee access to the land to farm or ranch and a clear path to build equity for the incoming generation. (Jennifer M. Latzke)

“Inheritance is never guaranteed. It is not yours. You did not earn it until it is yours,” Bothun said. “If you are going back to the farm and sacrificing a higher-paying job, understand exactly what you are giving up and understand that a promise is never guaranteed.”

To feel confident that the assets that you were promised are truly being transferred to you, it is crucial to put this in writing. Bothun advises that the written plan include the most important part: a way for the next generation to have guaranteed access to the land to farm/ranch and a clear path to build equity.

Lentz did this during her succession plan and, in addition to these documents, she constantly was checking in with the stakeholders to make sure everyone was on the same page and happy with the decisions.

Related:Set the table for a smooth transition

Many times, when the next generation comes back to the farm, they use their own money to invest into the farm. Whether it is upgrading equipment or investing in livestock, with the addition of a written estate plan, the next generation can feel confident that they are investing in their future.

In addition to a solid estate plan, it is important to follow through with more paperwork to give clear agreements and timelines.

“Those agreements might include position descriptions or some form of an entity, like a partnership or an LLC, including buy/sell agreements and lease agreements,” Groskopf said. “What happens is suddenly you are 40 years old and realize that you are just on the business end of a pitchfork, and you have no management or ownership.”

The importance of making this transition so early is because there might not be enough compensation for what you are doing if these plans have not been put into place.

If you need additional help regarding what documents need to be made for a successful estate plan, check out resources from Kansas State University for crafting these documents at agkansitions.org/resource-links.