The first step in any succession plan is talking to the family members involved. Sometimes people assume they know what others want – however, just 10% of communication is in words and actions. The other 90% is assumptions, deeper feelings and unmet needs. This is known as the communication iceberg.
For families finding it difficult to air their views and feelings with each other, there are tools available to help. In Teagasc offices, a “Farm Succession and Transfer Guide” is available, which explains the various steps, including a worksheet-type layout to help develop the farm’s succession plan.
Advisers can also help develop a succession plan. If communication between family members is an issue, a professional mediator is an option. These encourage equal contribution from everybody in the process and try to balance the stronger voices with the quieter ones.
Start with the asset owners
“We start with the asset owners, the more senior partners who generally are from 50 years of age upwards. It is their life’s work which they are reflecting on and considering their progression options,” says Clare O’Keeffe from Succession Ireland family business mediation services.
“The succession process is like a three-legged stool, beginning with the owners and family communicating in identifying needs and wants.
"Secondly, ensuring one has time to plan tax efficiently and the final leg is the legal transaction. Choosing to do nothing is also a choice, but generally it’s not conducive to family harmony nor continuation of the farm business.”
This initial conversation also brings in a level of respect around contributions to the family household income.
For example, if a spouse has worked off the farm and their income has supported the farm business, has this contribution been recognised and acknowledged, how does it need to be addressed?
Special considerations
Another consideration is if there is a member of the family with special needs, their future must be discussed and planned for to ensure their emotional and financial needs are properly secured. Care of aging parents must also be discussed.
It can also create tension if a person is unable to move on to the property ladder while living at home and not contributing
“An area that’s a growing concern is mental illness/addiction,” says Claire. “We have a large number of parents looking after adults who would otherwise be in the workplace and have fallen out of employment and by default are back at home.
“It can also create tension if a person is unable to move on to the property ladder while living at home and not contributing,” she says of siblings who may not be the successor, are working elsewhere, but living at home. “Who’s paying for what? At what stage do adult children take responsibility? As we grow up, periodically there needs to be a family conversation.”
Changing roles and working together
In a discussion between generations, if there is a difference of opinion in a project, the consequences will be borne by the successor. Tease out both options but let the younger person’s decision ultimately be the one that’s carried out, Clare advises.
Trust the younger person to take responsibility for the decision
“That can be hard, knowing that it won’t work from experience, particularly if it’s a non-reversible investment,” she says. “Trust the younger person to take responsibility for the decision. They will have to work long-term with the decision. This gives a sense of worth and value and inclusiveness; for example, changing a system in calf rearing, grass measurement and management, milking routines, selecting contractors, selection in breeding programmes, even a different dosing product. All of these topics have arisen as contentious issues at succession planning meetings.”
Establishing and maintaining respect in the home and yard may be another concern.
equal v fair share
Sometimes the younger generation have expectations or assumptions that might be unrealistic. There may be an assumption that the farm is going to one person and a site to the rest.
“Don’t hand on the farm with shackles on it,” she says. “Be realistic and talk together before you hand on the asset. It doesn’t have to be equal, but fair if possible and what’s fair is variable. All of these decisions are part of the succession planning process and need to be discussed beforehand.”
Clare O’Keeffe can be contacted on clare@successionireland.ie
The first step in any succession plan is talking to the family members involved. Sometimes people assume they know what others want – however, just 10% of communication is in words and actions. The other 90% is assumptions, deeper feelings and unmet needs. This is known as the communication iceberg.
For families finding it difficult to air their views and feelings with each other, there are tools available to help. In Teagasc offices, a “Farm Succession and Transfer Guide” is available, which explains the various steps, including a worksheet-type layout to help develop the farm’s succession plan.
Advisers can also help develop a succession plan. If communication between family members is an issue, a professional mediator is an option. These encourage equal contribution from everybody in the process and try to balance the stronger voices with the quieter ones.
Start with the asset owners
“We start with the asset owners, the more senior partners who generally are from 50 years of age upwards. It is their life’s work which they are reflecting on and considering their progression options,” says Clare O’Keeffe from Succession Ireland family business mediation services.
“The succession process is like a three-legged stool, beginning with the owners and family communicating in identifying needs and wants.
"Secondly, ensuring one has time to plan tax efficiently and the final leg is the legal transaction. Choosing to do nothing is also a choice, but generally it’s not conducive to family harmony nor continuation of the farm business.”
This initial conversation also brings in a level of respect around contributions to the family household income.
For example, if a spouse has worked off the farm and their income has supported the farm business, has this contribution been recognised and acknowledged, how does it need to be addressed?
Special considerations
Another consideration is if there is a member of the family with special needs, their future must be discussed and planned for to ensure their emotional and financial needs are properly secured. Care of aging parents must also be discussed.
It can also create tension if a person is unable to move on to the property ladder while living at home and not contributing
“An area that’s a growing concern is mental illness/addiction,” says Claire. “We have a large number of parents looking after adults who would otherwise be in the workplace and have fallen out of employment and by default are back at home.
“It can also create tension if a person is unable to move on to the property ladder while living at home and not contributing,” she says of siblings who may not be the successor, are working elsewhere, but living at home. “Who’s paying for what? At what stage do adult children take responsibility? As we grow up, periodically there needs to be a family conversation.”
Changing roles and working together
In a discussion between generations, if there is a difference of opinion in a project, the consequences will be borne by the successor. Tease out both options but let the younger person’s decision ultimately be the one that’s carried out, Clare advises.
Trust the younger person to take responsibility for the decision
“That can be hard, knowing that it won’t work from experience, particularly if it’s a non-reversible investment,” she says. “Trust the younger person to take responsibility for the decision. They will have to work long-term with the decision. This gives a sense of worth and value and inclusiveness; for example, changing a system in calf rearing, grass measurement and management, milking routines, selecting contractors, selection in breeding programmes, even a different dosing product. All of these topics have arisen as contentious issues at succession planning meetings.”
Establishing and maintaining respect in the home and yard may be another concern.
equal v fair share
Sometimes the younger generation have expectations or assumptions that might be unrealistic. There may be an assumption that the farm is going to one person and a site to the rest.
“Don’t hand on the farm with shackles on it,” she says. “Be realistic and talk together before you hand on the asset. It doesn’t have to be equal, but fair if possible and what’s fair is variable. All of these decisions are part of the succession planning process and need to be discussed beforehand.”
Clare O’Keeffe can be contacted on clare@successionireland.ie
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