MSU Extension logo square.jpg

Support local journalism by subscribing today! Click Here to see our current offers.

According to Montana State University Extension, an important goal for many Montana family farm and ranch enterprises is to transfer land and businesses to the next generation, but the process can be challenging.

According to Marsha Goetting, MSU Extension family economics specialist, some families may avoid the process completely because of its economic, legal and family decision complexities. Others may start the process but abandon it to avoid conflicts that can arise from differences in goals, values and perceptions of fairness among family members.

The MSU Extension MontGuide “Transferring Your Farm/Ranch to the Next Generation” has worksheets and information for each member of a family to help focus their thoughts and feelings about succession planning issues.

Because of the strong bonds inherent with the heritage and lifestyles, generation transfers are more frequent in agriculture than any other business, Goetting said. Unresolved conflicts can have major impacts on the long-term success and viability of the operation as well as the transfer plan itself.

Goetting said the first question families should address in this process is whether the business is profitable enough to transfer to the next generation. Because emotions can get involved, families may need to consult with an accountant or farm management consultant to assist in this evaluation.

“During my estate planning meetings across Montana before COVID-19, members of the younger generations found it difficult to initiate a discussion about the farm and ranch transfer and succession processes,” Goetting said. “They fear older generations may perceive them as being overly interested in their inheritances. On the other hand, when members of the older generations bring up the topic, younger generations may not be responsive. They do not want to think about their grandparents or parents dying.”

Families who have been through the transfer and succession planning process suggest starting at an individual level, Goetting said. Then, families should discuss issues in a larger group. For example, if a father feels it important for the farm or ranch to remain in the family’s possession but his wife is ambivalent, they need to come to an agreement before they begin succession planning with their children. Afterward the two generations can meet to share thoughts on the process.

Reaching a family agreement about goals before a business discussion helps negotiations run smoothly, Goetting added. While there still may be times of tension or conflict about values and roles in the family business, communication is key in keeping the process moving.

“Preparing farm and ranch family business members for transfer and succession planning is a part of the older generation’s responsibility to the younger generation,” Goetting said. “The legal and economic aspects of the transfer plan are important. Connectedness among the family business members and the working out of future management strategies, or succession planning, is also absolutely critical to the success of any transfer plan.”

“Transferring Your Farm/Ranch to the Next Generation” can be found at http://msuextension.org/publications/FamilyFinancialManagement/EB0149.pdf. Printed copies are available from county or reservation Extension offices or by contacting Goetting at Montana State University, P.O. Box 172800, Bozeman, MT 59717.

0
0
0
0
0

Online Poll

Do you think a COVID-19 vaccine will be available by 2021?

You voted:

Latest E-Edition

(0) comments

Welcome to the discussion.

1. Be Civil. No bullying, name calling, or insults.
2. Keep it Clean and Be Nice. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
3. Don't Threaten. Threats of harming another person will not be tolerated.
4. Be Truthful. Don't knowingly lie about anyone or anything.
5. Be Proactive. Let us know of abusive posts. Multiple reports will take a comment offline.
6. Stay On Topic. Any comment that is not related to the original post will be deleted.
7. Abuse of these rules will result in the thread being disabled, comments denied, and/or user blocked.
8. PLEASE TURN OFF YOUR CAPS LOCK.