Every farm family has a story, and I have just had the joy of spending 2 days with 380 Nebraska Women in Agriculture at their 40th conference. The session was led by Katie Samples Dean a straightforward farm-owner lawyer who suggested that many plans for succession/transition are foiled or are the wrong plan because Grandma did or does not understand the consequences of her decision-making.

While I waited to board my plane in Kearney, the story appeared again with a young farmer reaching out for answers as his mom was not aware of the current reality of the farm’s business structure. She listens to non-farm siblings for their input and is unwilling to even consider that her dead husband’s wishes, which she wants to honour, may not be the best direction for the farm or the family in 2025.

Here are some steps to consider:

1. Educate your mom and yourself as the successor with farm financial literacy. You need to understand your best options for the structure of the business and navigating expectations. Mom may want the land to be divided among all children, even the non-farm heirs, but what happens now if there are addiction issues, divorce, or other new circumstances that destabilize the family? When Dad passed, the farm was at a different stage. You need to observe the new needs of the family and the business.
2. Be clear with mom or grandma how much income she needs to live at the level she needs. It would be wise to have a certified fee-for-service financial planner to assess the level of financial security Mom has. Does she have enough income to live well for the next 2 decades? Does she have long-term care plans?  Many women have life estates to stay in their homestead homes, yet the farming grandson who was promised the home cannot move because Grandma forgot that promise, and her non-farm child is telling her to stay put! Grandma, you have friends in town, you will be closer to medical care, and you can still come out to the farm often to pick raspberries and watch the cows. What is best for the whole farming family?
3. Avoid paying tax. (Pushing the taxes forward with the capital gains on the land and other accounting/tax issues) Lawyer Katie used an example of great-grandparents, grandparents, and parents rolling land to the next generation, but they did not know or were not able to predict the future of very high land values, and the tax burden on the next generation who had other plans for the high-value land. Katie’s comment was to do lots of scenario planning so you can truly understand the consequences of your decisions. This is where being stubborn and not paying some of the tax as you go may hurt the succeeding generations.
4. Allowing conflict triangles. It is not uncommon for folks to share that the non-farm heirs have been spending a lot of time at grandma’s house and creating discord. In conflict resolution, we encourage folks to go directly to the source of the tension and have courageous, respectful conversations with the parties involved to create solutions. Grandma is hurting the family when she takes sides, when she is not honest about the tension points, or avoids conflict resolution talks altogether.
   
5. The deal is done, sister. The sisters got payment for land 6 years ago and were happy then but are not happy now as land values have risen. The mindset of “we deserve more now” is the mindset of greed and entitlement, which is fragmenting farm families.  Grandma is terrified of family conflict, so she avoids the hard discussions. She also needs to be clear that the farmland is to be kept intact, and the siblings who are non-farm heirs may have access to land but there will be long-term rental agreements in place with the farm heirs holding the right of first refusal.
6. Buying out siblings who are doing just fine financially. This is a scenario that fragments families even after they are bought out. We bought out 3 quarters of land when my husband’s sisters were in their thirties. This would be a real hardship if we had to do this now when the land value has gone from $67K to $450K. The real issue here for Grandma is she wants all of her children to get some form of assets or cash, but she has little cash or liquidity because she comes from the generation that survived high interest rates in the 80s but also put more wealth back into the farm business and did not save or use personal wealth strategies to give her liquidity on the personal side.  The lesson here is don’t avoid saving in TFSAs or other investments for your golden years. Look at other financial plans to help you have more options to share and cascade wealth to your family. Again, seek the expert scenario insights of a financial planner.
7. Hire a farm management specialist. This person can help all parties understand the cash flow reality of the farm and look for opportunities to grow income. These folks are also good a current reality checks of what the farm can manage to pay out the partners wanting to leave the business or how to buy out grandma’s shares.
8. Don’t procrastinate. Dementia for grandma may be knocking on her door. I met women in Nebraska whose aging folks do not have a plan in place, what Katie the lawyer calls “no Plan,” and they both have signs of dementia! Planning is a very important activity but heart attacks, cancer, accidents, and other sad stories in the neighborhood just don’t seem to motivate sane folks to focus and execute a transition plan.
9. Choose to act. You can stew and get mad at Grandma for taking sides, or you can get professional facilitation to create a better understanding of the financial realities of living costs for Grandma, the farm business team, and the non-farm heirs to navigate expectations, create solutions, and celebrate the next birthday party together.
   

What is your next step towards harmony through understanding going to be?

Elaine Froese and her team are here to help you embrace positive conflict behaviour and figure out how to explore the needs and wants of your farm family. Reach out here for your free discovery call today. Grandma is not getting younger.

Did you enjoy Grandma, Stop Hurting Your Family’s Transition? You might want to check these articles out too:

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