“Don’t worry, I’ll take care of you” is the ultimate conversation stopper, says Steve Isaacs, UK extension coordinator for farm management, in the complex and often unpleasant and unproductive dialogue between family generations regarding what will happen to the family farm.
Family farm succession is about more than legal and tax implications according to Dr. Isaacs who is also director for the UK Tax Education Program. It is about the transfer of assets, management, leadership and, yes, debt in a cyclical process.
Isaacs stressed that the first priority in this cycle is assuring an adequate retirement income for the parents. The estate tax is a paper tiger for most people; “death taxes don’t destroy family farms… families do.”
According to the Bureau of Labor Statistics there are only two categories of workers that are older than farmers – school crossing guards and Walmart greeters.
Isaacs recommended engaging a transition team familiar with farmland issues that could include an attorney, accountant, financial planner, lender, extension educator and/or business consultant. This team’s function is to identify and generate ideas, technical information, evaluation and suggestions.
Isaacs recommended conducting the transition discussion at a neutral location, not at the family kitchen table. He advised treating siblings fairly, not necessarily equally and include spouses in the discussion.
A facilitator and recorder will summarize and document the items on which the family has agreed.
With some guidance and a transition plan, Isaacs says the conversation by the entire family can become “Here’s how we’re going to take care of things.”
Steve will be conducting a full day session on this subject in the near future. Check our events page for that announcement.