Transition planning
I’m two for three today on fertilizer haulers feeling left out, ignored, disrespected and generally made to feel like they had no voice on the family farm. The third guy just sat in his truck and didn’t bother sweeping out, so my average could have been higher. One guy was early thirties, the other early fifties. Both had tried making inroads at various points, but parents, uncles, aunts or neighbors made that first quarter section or dozen head of cattle impossible to attain. That all important financial and emotional toehold that would have given them a start in the family business.
Depressingly, the younger of the two, who was also a CPA but wanted to farm, had tried using a transition planner, but to no avail. Documents sat on a counter for months. He was told that if he had children, that would prove he was committed to the business. Maybe not the best line to lead with when searching for that special someone in your life…
Our family recently ‘completed’ (although it never really finishes), a transition plan for our farm. Transition, continuity, handing-off, passing-down, corporate restructuring, all words that mean some sort of plan for dealing with major changes in the goals and day to day operations of a farm. Usually, this means an older generation becoming less active in the decision making and risk taking aspect of the operation. Rather than worrying about the price of wheat and urea, passive income (and your accountant may disagree with that term) from rent, dividends etc. provide a retirement package for the baby boomers. For me, I get an overqualified errand boy who also runs the new sprayer, and free food and coffee all for rock bottom prices. That’s right, for the low low price of management position in an industry based on fertilizer cartels and jetstreams, you too can leverage your parents' twilight years into cheap labour and calories. Link to course in bio.
So what is transition planning?
With so many slippery terms I’ve already used here, it might be best to discuss what it isn’t.
It is not:
Avoiding difficult topics.
Seeing what happens when the secret second will is revealed after a parent dies.
Denying anyone with a financial or emotional stake in the operation a seat at the table.
Working without timelines and expectations.
Taking care of things yourself. You might have a financial planner, a hostage negotiator, a lawyer, and a mystic in your immediate family circle, but there's a good chance one of those people put dog crap in the other one's shoes 20 or 30 years ago. Don’t save a few thousand dollars here or there when you're moving assets in the 7 figures around.
Throughout the year and half process we have many setbacks, and delays. We revisited issues that we thought had been dealt with, and sent dozens of emails about the same topic to accountants, advisors, lawyers, and bankers. Some of those emails even went to the correct people.
Another disclaimer: every farm is different. The challenges we face and the successes our transition had will be very different from any other farm. I’m more guilty than most of living in my own ag-bubble…I haven’t spoken to many others about this process, but since going through it I try to make it a topic of conversation when the mood strikes.
I’d be happy to share with you the names of the people we worked with, especially our continuity planner. We were lucky enough to have someone with a deep well of empathy and tenacity. I’m very lucky my family is as fair, courteous, and honest as they are. I much prefer this story to the ones I got from the gentlemen who graciously supplied our farm with N for our next crop.
