Last month, our first article introduced the Hunter family and their journey through farm succession. The Hunters aren’t a real family; you won’t find them in a phone book. But they are real in that they’re based on our real-life experience consulting with farm families. You’ll find families like the Hunters across the country. Through them, we will explore the challenges and triumphs that families face during the succession process.
Let’s recap. The Hunters are a fourth-generation farm family with a mixed crop and dairy farm in southwestern Ontario. Mary’s husband Jack passed away two years ago. She is 80 now and continues to live on the farm. Her only child, Bruce, works on the farm and has partial ownership of land purchased over the years, but not of the farm itself. Bruce is looking for a pathway to ownership and it was his wife Susan who contacted us about succession planning. She not only wants to see a plan in place for her husband, but also for their adult children: Mark, who currently farms with Bruce; Maggie, who is eager to return home to the family farm; and Matthew, who works off the farm.
This issue, we get into the first phase of the succession process. We talk individually with each family member and look to align their visions for the future.
Mary Hunter, 80 years old
“This farm defines me,” Mary tells us. “It’s all I’ve ever known.” Overall, Mary is confused why they need a formal plan in place when the partnership with her son has always worked for her. “He talks about not having ownership, but he does own several pieces of the land he bought with his dad.”
We ask Mary to share her story and she recounts that it wasn’t until her father died that the farm officially became hers and Jack’s. “We never pushed them; Jack stayed pretty quiet about it all and it worked out for us. We did have a different relationship though, Jack and me.”
What Mary begins to reveal is a hesitation with Bruce and Susan’s marriage. Despite their being married for almost 35 years, Mary still has concerns. “Susan isn’t as traditional as our family.”
Mary shows her first sign of emotion. This strong-willed lady is fearful of marriage breakdown and the family legacy being lost. In response, we talk of a gifting document, which adds a layer of protection to the farm legacy in the event of marital breakdown.
“That’s a conversation I want YOU to have with them, Darrell,” Mary says.
Bruce Hunter, 55 years old
Bruce feels he’s been patient. However, when his father died and his mother became hesitant about transferring title and ownership to him, Bruce became frustrated. “Here I am at 55 and I don’t have ownership,” he says. “My son wants this succession plan to be about him; my daughter wants the plan to include a pathway back for her; I want an ownership plan for myself first, and my wife just wants everyone to be happy.”
Bruce and his wife, Susan, are happily married and enjoy the life they have built together on the farm. They particularly love sharing the farm with their children and grandchildren. “In the end, we all want the same thing. We want the farm to be in the family. I just don’t see how we can make everyone happy.”
We ask Bruce if the future of the farm includes both his son and daughter working there. He pauses. “I would love to think so, yes.”
Susan Hunter, 54 years old
For the first time Bruce has opened up about seeing a pathway for both their farming children. However, we keep this information confidential during our discovery phase.
“I’m really nervous about (our daughter) Maggie and how this plan will impact her,” Susan says. “Bruce and (our son) Mark have worked together for so long on this farm, I don’t see how a plan will ever come together that includes her.”
Susan’s first focus is family harmony. “I need to ensure we are all still able to share a meal together.” What is in the way of that? “I don’t know if it is possible, but I do know that if we don’t include Maggie in this plan, she will never come home.”
Matthew Hunter, 30 years old
Matthew is a happy young man. “There is no part of me that wants to work on the farm,” he laughs. We talk more about that. To him, it is simple: he spent his time on the farm when he was younger. Then he went away to university and found his niche in engineering. “I have built a great life. Succession isn’t about me.” Matthew and his wife, Sarah, however, are parents to two young boys. “What I really want is to know the farm will always be there,” he shares. “That one day if my sons want to work there, they can… we want to stay connected to the family legacy somehow.”
Maggie Hunter, 28 years old
“I want to come home,” Maggie tells me. She asks us to meet off-farm where she will be more comfortable.
Maggie has made big impacts introducing technology to the farm where she currently works, and she is genuinely excited about sharing this opportunity with her father and brother.
“I am willing to work and prove my value,” she says. We talk further about her ownership thinking. “My dad needs to be an owner, then my brother and then me. I get that. I am willing to wait, but not forever.” I ask Maggie how she envisions the day-to-day on the farm, working with Mark and her dad. “I have no interest in being Mark and doing what he does,” she says. “There’s room for me and for the opportunities I can show them.”
Mark Hunter, 26 years old
Mark is excited about the arrival of his first child and is determined to have a clear pathway to ownership. “I feel like I have built so much of this farm with my father,” he says. “We really have something here and I can’t wait to see what it could be.”
He is optimistic, which strikes me as slightly odd, but we haven’t yet discussed his sister rejoining the farm. The farm has been his entire life.
I ask him about Maggie joining the farm. His demeanor slightly changes. “I haven’t spent too much time thinking about it to be honest,” he says without looking at me. “I know what we’ve been building, and I know where it can go. Maggie has some skills for sure, but she has never worked an acre of dirt. She was always running away from the work when things were busy in the fields.”
Mark admits Maggie knows technology better than most. “But she knows it’s a dead end with Grandma holding the chequebook. But — hey — if she thinks she wants to be here, I’m open to seeing what that looks like.”
Grace Hunter, 25 years old
Mark’s wife Grace has strong opinions about the future of the Hunter farm and hasn’t yet ruled out the offer by her family to work and own their home farm.
Grace is nervous about Maggie’s involvement and views it as an unwelcome shift in priorities. “I just want to know what the opportunity is here so we can make an informed decision about where we will settle before we have the baby,” she shares.
She’s very open about how hard Mark has worked on the farm, how his teenage years and weekends were always spent here, and how he isolated himself for the betterment of the farm. “Mark doesn’t have anything else. This is it,” she states plainly. I ask Grace if she can see a plan for ownership that includes both her husband and sister-in-law, or if she only envisions her family at the farm. “I don’t know,” she replies honestly. “A few months ago, that wasn’t even a consideration for us.”
After these discovery meetings, we reflect on what we have learned. We note there are no family members who are strongly opposed to specific options, refusing to work alongside one another, or rejecting a transfer of ownership. The family members also share core values and we are able to align a vision: they all want the farm legacy protected, they all care about and desire family harmony, and while there are concerns about how to get there, they all want to secure continuity of the farm.
However, there is also a shared sense of their inability to reach their vision and to make everyone happy in the process, and to do both in a way that is financially viable.
The good news is that what the Hunters are experiencing at this stage is normal, and nothing in these family discoveries has surprised me. They are a family committed to making it work. My next step is to bring together the stakeholders, this time including Matthew’s wife Sarah.
I begin our meeting by highlighting the positive and confirm they all want to see the farm legacy protected and to maintain family harmony. Additionally, they agree to a plan that includes multi-generations and ownership options for Bruce as well as for Maggie and Mark. There is no opposition to Maggie coming back, but rather uncertainty about how it would work.
The family also wants the plan to be continuous, and to encompass a safeguard for the grandchildren that ensures their futures are considered. The Hunter family agrees to these principles to moving forward.
I then review the values they share: farm legacy, family harmony and financial security. Again, there is consensus this is the direction.
Next, we review how we will move forward in this process by establishing a Family Code of Conduct. I want the family to agree on acceptable communication, who is at the table and whose voices we hear. We create this together and it includes items like this:
- Everyone here tonight will have a voice in this process, but not everyone will have a vote.
- Everyone will have the opportunity to talk, without being interrupted, and will be able to finish their thoughts in a respectful manner.
- This is a process of moving forward and does not focus on the past.
I feel excited about the progress we have made during the family phase, and I am hopeful as we enter the next part of the planning process, the financial phase
As I leave the family meeting that night, Mary whispers to me, “Don’t forget to mention that gifting document next time.”
The information shared in these articles are based on real life families we have worked with but are fictional. They are not designed to provide legal and accounting advice to your own family farm and should not be taken as professional legal or tax advice. We encourage all readers to work with a professional advisor and advisory team on succession planning.