The Rural Voice, 2002-01, Page 24HANDING DOWN THE FARM
As a generation of farmers ages, there's a lot of
work to be done in preparing to transfer the farm
ma to the next generation M-
mo
By Keith Roulstoiz ��
Arecent estimate puts one third
of Canadian farmers at age 55
or older, meaning that in the
next decade most, if they retire at 65,
will be turning over the farm. That's
a total of 120,000 farmers who will
retire, with $50 billion in assets and
the potential for a lot of conflict if
proper planning isn't undertaken to
make the transfer work and treat non -
farming children fairly.
"When I sit down with a family I
tell them that the goal is first and
foremost that after mom dnd dad are
gone, the family still sits down for
Christmas dinner together," says
John Uren a St. Marys -area farmer
himself and financial planner with
John H. Uren and Associates Inc.
Achieving that goal can be hard,
he says because many families would
"rather discuss sex or religion than
talk finances".
He speaks from experience, being
a fifth generation farmer sandwiched
between parents and a 28 -year-old
son who is looking to become the
sixth generation on the land.
One of the worst cases he ever
encountered was on a New
Brunswick dairy farm where he was
called in for advice and was asked to
read the parents' wills aloud to two
of the children — a will that left all
the money to one child in the belief
she would "do what's right" when
they were gone.
While there's a tendency to think
that succession planning is all about
transferring money, the process
should begin by dealing with "soft"
20 THE RURAL VOICE
issues such as what everyone hopes
to get out of the farm transfer, Uren
says. The mind thinks in pictures and
as an advisor you have to try to paint
some pictures of how the future
might look, he says. At the beginning
of the process "The last thing you
want on the table is some kind of
ledger sheet," he says.
He remembers going to a big
seminar on farm succession several
years ago at which participants were
first asked to fill in a questionnaire of
what they wanted to do in their
retirement before getting into the
lectures. The reasoning for the
questionnaires became evident at one
table when a husband and wife came
up with totally different visions of
what their retirement would involve.
That's the kind of lack of
communications that needs to be
dealt with before the financial figures
evcii become considered, Uren says.
While there are experts like Uren
who can be brought in to help the
process, families can begin thinking
about the process before they commit
to an advisor. Two Canadian
websites offer initial planning advice.
The Canadian Farm Business
Management Council's website at
www.farmsuccession.com even has
software to download to help make
the process easier. FCC's website
www.agrisuccess also offers
information, not just on succession
planning but on how to avoid conflict
in the multi -generational farm. There
are also articles available on
OMAFRA's website.
Uren says there needs to be a team
approach involving the family
accountant and lawyer as well as an
advisor like himself but dealing with
the human issues comes first. When
he sits down with a family he usually
draws a line down the middle of a
sheet of paper and says the goal of
the session is to list assets on one
side of that line and goals on the
other. Getting the assets down is
generally relatively easy; it's the
goals side that causes the problems,
h� says.
Most families haven't gone
through the thought process of what
their goals are and how their goals
mesh with the goals of other
members of the family, he says.
This part of the process can be
difficult and lengthy, he says. You've
got to sit there long enough that all
the issues come out on the table, he
says, like the fact parents aren't
comfortable turning over the farm to
a daughter because of her husband.
"You have to find out if the
parents are ready to give up control
and is the younger generation ready
to shoulder control," he says. Some
children might have grown
comfortable in letting the parents
take responsibility while they lived
more worry free lives.
As a son who took over the family
farm Uren says there's a point when
it settles in and you know you are
taking over the responsibility. He'd
like to see everyone meet their
retirement goals as his own father did
up until his death, he says. He knew