Make a List and Check it Twice: Tips for Discussing Succession Planning this Holiday Season
by Micah Most
The month of December has many people gathering with members of the family only seen a few times a year.
For families who work in agriculture or who run small businesses, it can also provide an opportunity to have a conversation about the future of the operation with all of the interested parties around one table.
These discussions can be uncomfortable. No one likes to spend time thinking about what might happen following the death of a loved one. However, the discomfort will be all the greater if a tragedy occurs and the family ranch or other business is not prepared to conduct a transition.
Have a plan and make it known
If a primary operator or manager wishes for their children, extended family, employees and others who are involved to carry on the work after their passing, it is important for them to have a plan. It is also critical the plan is known to the people involved and updates are clearly communicated.
The four types of planning recommended by the University of Wyoming (UW) Department of Agricultural and Applied Economics are business planning, retirement planning, succession/transfer planning and estate planning.
The focus of each is internal business growth and development, finding financial security after stepping back from active participation, how to hand the reins to the next generation and protecting assets during the time of transition, respectively.
A full Ag Legacy course and guide to these four phases of planning for business transfer was developed by Rod Sharp, Jeff Tranel and John Hewlett and can be found at bit.ly/legacy-UWyo.
Contact UW Ag Economist John Hewlett for more information at hewlett@uwyo.edu or 307-766-2166.
These resources are also available through UW Extension offices in every county in the state.
Manage professional relationships
Included in a complete succession plan should be details of the business professionals and relationships which contribute to the operation’s function. This team of professionals can include an accountant, a banker, a lawyer and an estate planner, among others.
Bring the kids or heirs to meetings with these people to help them begin to understand the business processes required to keep the operation going. This will also help professionals make the transition more smoothly when it is time for the next generation to take the reins.
Perhaps there will be an opportunity to schedule an end of year meeting for a time when college students are home or other key people are in the area and these introductions can be made.
Meet in a neutral space and time
Many folks in the northeast corner of Wyoming were fortunate to attend one of the series of succession planning workshops hosted by the Wyoming Stock Growers Association and Guest Speaker Dr. Wesley Tucker of Missouri last month.
One of Tucker’s helpful suggestions was to host discussions about family business decisions in a neutral location such as the back room of a local restaurant or a public library meeting room. The idea is also endorsed by the Ag Legacy program.
This simple shift can help eliminate some of the power dynamics and emotions experienced during a traditional meeting around a kitchen table, where mom and dad or grandma and grandpa have always been in charge.
A neutral setting helps build a level playing field where input can be weighed and judged more objectively.
It also goes without saying difficult family meetings should be set aside for a time separate from cherished holiday traditions so potential disagreements do not spoil the festivities.
Outside mediators help navigate tough conversations
Succession planning conversations are difficult. Each family will have a unique perspective and approach.
Determining how property and business assets will be divided among children can quickly become contentious and heated. This is especially true when some siblings are actively involved in the operation and some are not.
If conflict becomes unmanageable and a family needs help getting through it, an outside facilitator can make sure everyone is being heard and can help families peel back the layers to get to the heart of certain contested points.
The Wyoming Department of Agriculture (WDA) provides voluntary, confidential, low-cost mediation services. For more information and to request a mediator, visit bit.ly/WYmediation or contact Lucy Pauley at 307-777-8788.
The holiday season provides many reasons to gather. As family spends time together, consider taking the opportunity to initiate or continue conversations about family business succession planning.
Resources are available through UW Extension and WDA to support people as they navigate the complexities of succession planning in family-run farms, ranches and small businesses.
Micah Most is the University of Wyoming Extension agriculture and natural resources educator serving Johnson County. He can be reached at mmost@uwyo.edu or 307-684-7522.
