Planning for the Farm or Business’ Next Generation
This is a difficult family topic. When there is a family business or farm and one or more of the children are going to participate and take over – there are difficulties which are usually due to miscommunication.
The children would like to do more – really get involved in operating and managing the operation. They know they need more skills and need to learn more about the customers, the vendors and marketing. The problem from the kids’ perspective is that dad and mom don’t seem to want to teach them and bring them in on the big decisions. The kids feel awkward. They don’t want to appear to be too pushy – if their parents thought that it was the right time, they would be including them in the decision making. The kids don’t want to offend their parents – they don’t want it to appear as if they are trying to push their parents out of the way.
The parents wish that the children would do more. They don’t seem as if they are really stepping up and learning all they need to know in order to run the business. Maybe they really aren’t that interested or committed? The children are adults so the parents don’t want to harp or tell them what to do.
The big problem here is not that the children are not committed. It also isn’t that the parents are reluctant to let go of some of the responsibility. The real issue is communication. Everyone is being too careful not to offend.
What is needed is a guided discussion to get a plan together on the transition of the family farm or business.
- Find out what everyone’s goals are. When and how are the parents planning on retirement? When do they want to let go of the reins? When were the children planning on taking over?
- Find out what is needed. What skills do the children believe that they need prior to assuming leadership? What do the parents think the children need to learn?
- Put together a plan to implement the goals. When will new skills be taught or acquired? How will this be done? What is the time table?
- The Transition. When and how will the parents start to let go of the management and decision making? What will their role be then? If the children want to make changes in the business, will that be done with or without the acquiescence of the parents?
These steps are necessary prior to changing your financial and estate plan. Once these steps have been taken with the goals and plans in place, the estate and financially planning steps will be much easier.