“I can’t emphasize enough how important it is to find an accountant who will ask the really hard questions,” says Elspeth Mclean-Wile, referring to the experience she and her husband gained in the transfer of their dairy near Bridgewater, N. S.
It’s a view that’s echoed by the advisers who work on the other side of the table, such as Jim Soldan, principal owner of The Family Furrow, an agricultural consulting service in Chilliwack, B. C. Soldan is also a member of the Canadian Association of Farm Advisors.
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“Many believed that if they had a good tax strategy then everything else would fall into place,” Soldan says. “That is so far from the truth. You can have a flawless financial and business plan that can still tear the family apart.”
Whether a farm transfer is within the family or to a non-family member, Soldan says you should be asking the same questions. “Everyone wants the same thing going into succession in whatever structure: success, peace, and to pass on the legacy of the farm. You have to look at it from the point of view of the family.”
While working as an agronomist in Alberta for 20 years, Soldan found producers were searching for answers to human resource and family problems around management and succession.
Everyone needs to be involved, Soldan says. And everyone involved has to recognize what the other is thinking, what they want out of the operation and what they’ll put into it. All of these, he recognizes, are things that independent farmers generally hate to discuss. But Soldan is convinced every aspect of the farm and its operations must be agreed upon, set down in writing, and signed off on.
“To achieve any of this people need to sit down, eyeball to eyeball, kneecap to kneecap, and hash it out,” he says. Meetings should be a regular part of any farm operation to update and renegotiate the agreement, “not just gathering because Mom baked a pie that day,” he says.
So what are the hard questions that Soldan asks?
What is the relationship like now? Is there real respect? What has been driving the relationship? Have things been occurring to demonstrate the individuals involved are serious?
Why are either or both generations doing this?
Has everyone had input into the discussion and decision?
Is the younger generation able and willing to learn?
Is the older generation willing to teach and let go?
What is each actually contributing in terms of money, time, and energy to show they are personally committed to making it happen?
What might be the risks to either of the generations because of this proposal?
How do others in the family feel about the impending decision?
Have you done your homework with accountants and lawyers, and do you understand the financial sense of the whole thing?
It’s worth noting the human questions are at the top of Soldan’s list while financial considerations run near the bottom. What everyone wants to avoid is conflict, he says. Setting down policies and procedures around interpersonal relationships, codes of conduct, value statements and making each member of the operation accountable will go a long way toward doing just that.
