Parents wanting to pass on the family farm need to find out what their
children’s expectations are, including those no longer involved with
the farming operation.
But during those discussions, the parents must remember their own
expectations and needs. Once the farm is transferred, will they have
enough money to comfortably retire?
“You have to consider what you have to give,” said Jill Falloon,
Manitoba Agriculture family living specialist. “You’ll want to retire
and you’ll want something to retire on.”
That was part of the advice given during a session on farm succession
planning, held as part of the Manitoba Farm Women’s Conference in
Brandon last week.
The three panelists were bombarded with questions, a reflection that
many farmers in Manitoba are at or near retirement age and there will
be billions of dollars worth of farm assets transferred in the province
within this decade.
The panelists were Pat Fraser, a lawyer with Meighen, Haddad and Co.,
Julee Galvin, an accountant with Meyers Norris Penny who farms with her
husband near Virden, Man., and Falloon, who works in the home economist
section of Manitoba Agriculture.
Two of the most difficult questions asked of the panelists were how to
get the discussions started and how to prevent those discussions from
becoming a wedge that splits families apart.
“It has to be done tactfully, it has to be done carefully,” said
Falloon. “You don’t want to feel like you’re pushing your parents by
any means, but it certainly needs to be attended to.”
Panelists suggested that all members of the family be involved in the
discussions, not just the parents and children remaining on the farm. A
family meeting was suggested as one avenue. Another option would be to
approach each child separately before bringing them all to the table
for a family meeting.
In the case of conflict, an objective person trusted by the family
could be consulted to help break the impasse, such as the local
minister or agricultural representative.
Ultimately, the goal would be to keep the lines of communication open.
“You want to keep your family intact too, not just the farm,” said
While it may seem easier to avoid those discussions, the panelists
cautioned against that. Without careful succession planning, there’s a
greater risk that the assets left by the parents will be heavily taxed
and that rifts among their children will emerge.
“If you do not plan for a successful farm transition, it causes many,
many problems,” said Galvin.
Parents were advised to start planning for a successful farm transition
years before they intend to retire. Then the plan can be adjusted to
take into account changes that happen as the parents draw closer to
There are many ways to get the discussions started. People wanting
advice on that can approach a home economist, a farm management
specialist or an ag rep with Manitoba Agriculture, suggested Falloon.
Another option would be to attend a seminar on farm succession planning.
Falloon said it’s wise to have a general idea of what the farm
succession plan will look like before taking it to accountants and
The intent of the plan needs to come from within the family. At some
point, however, lawyers and accountants should be consulted to ensure
the plan is properly spelled out in documents. That will diminish the
risk of the parents’ wishes being contested in court after they are
“You really can’t do this at home,” said Fraser. “There’s too much
“The rules are very complex,” added Galvin. “They’re not very
forgiving, and if you’re offside, you’re offside.”
Galvin also emphasized that land, money and machinery are not the only
farm assets that get passed from one generation to another. Management
skills also have to be a part of that transfer. The transfer of
management skills should be under way well before the parents’ intended
time of retirement.
“Dads can have a really hard time letting go,” Galvin said, noting that
one result can be children who feel they are nothing more than hired
workers. Another result is that when the children do take over the
farm, they may be ill equipped to manage it.
When it comes to transferring the farm, parents need to take a serious
look at whether any of their children have the skills to carry on with
the operation. Sometimes, the parents might be wiser to sell the farm.
When the intent is to pass the farm to a child or children, parents
need to realize that fair is not always the same thing as equitable,
said the panelists.
For example, if they try to ensure each child will receive the same
value of assets when they pass away, that may mean selling off part of
the land to satisfy the non-farming siblings. However, that might
jeopardize the viability of the farm. An alternative would be to look
at other assets that could be passed to the non-farming children.
“Sometimes you can break down the whole structure of the farm with just
a few quarters of land,” Galvin said.
“That causes a lot of problems.”
Despite the challenges, the panelists said farm succession plans
generally go well if they are properly planned and documented.