Succession Planning: the family deal

"Typically, we go through five stages to take a family through the transition/ succession planning process."

"Make a plan that changes with the times."

    It’ll come as no surprise that most families have a verbal deal about succession planning: who will take over the farm. These verbal deals go something along the lines of, “the boys get the farm, while the girls get the house in town and the super.”

    But life happens; children grow up, move away, get married and perhaps end up in a business of their own that make these informal agreements obsolete. Instead, we suggest a plan that changes with the times.

    So that we are on the same page, we are talking about succession planning or transition planning, as we prefer to call it. We call it this because the handover of the farm takes a long time as the older generation works with the next before handing it over entirely.

    A transition plan captures who gets what and when it will happen after a process of listening to and balancing everyone’s goals, their challenges and wants, all the while keeping an open dialogue to manage conflict when it arises.

    It’s a process we’ve gone through with many families as an independent and objective listener and mediator. There’s no set timeline for this process because it takes time, dependent on family circumstances. Typically, we go through the following stages to take a family through the transition/succession planning process.

     

    1. Getting to know you and the family

    We start with one-on-one chats with everyone to get to know them, what drives them, and what’s behind their decision making.

    We also take the time to get to know the family culture and their overall values to get the big picture.

    1. Goals and common ground

    Once we get to know everyone and understand the big picture, the next step is to plot out individual goals to draw out common themes.

    1. Begin to shape the plan

    With everyone’s goals identified and with the overall values and culture of the family known, we shape the transition plan, so it acts as a reference point to discuss.

    1. Get everyone at the table

    With the basic plan drafted, the next step is to get everyone at the table to discuss and, where needed, bring in experts to offer advice. An essential part of this step is to run the meetings as if they were a board meeting with an agenda and a chair to make sure everyone contributes.

    1. Speak up

    Everyone should be clear about their intentions and speak up at this stage, so everyone has their say.

    With input from everyone, the next step is to complete the transition plan, distribute it to everyone and have their sign off, so everyone knows what it means for them and the family.

    As a live document, the process doesn’t stop once with the written transition plan. It will need to be updated as things change, and importantly, it must communicate changes to the whole family. The transition plan should contain no surprises.

    If you want to talk about transition plans, contact your SproutAg representative.

    DISCLAIMER: The information in this email is general and does not constitute financial advice.

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