Maturity makes for smooth transition

Family farms | Consultant stresses communication as families balance money and emotions

Reg Shandro spends hours sitting at farmers’ kitchen tables discussing futures.

Based in Lacombe, Alta., Shandro is building a business around easing the burden of succession planning for family farms. It’s not easy work labouring through the wide range of emotions, dynamics and finances of individual families.

“All farm families have their issues,” he said during Crop Production Week in Saskatoon Jan. 10. “Succession doesn’t happen overnight.”

Shandro has worked as an agrologist, bank manager and in accounting, but credits his farm upbringing as the cornerstone necessary for specializing in farm succession planning. At age 48, he combined his life experiences and went back to school to become a qualified mediator.

“An absolute holy grail, crack the code piece that’s required to make this work. Without that, you’re a fledgling adviser,” he said.

With agriculture booming, so has his business, Farmacist Advisory. Although the primary driver is economic good times, Shandro said it’s important to understand why the successors are coming back.

“Are they coming back offensively or defensively?”

He describes defensive as a lifestyle move in which people return to the farm because it is a comfortable place compared to the outside world.

An offensive move is made by someone who always had the desire to farm and returned with a business plan and desire.

“Those are the farms that are successful,” he said.

Farm transfer plans need to focus on three factors:

  • Perspectives include the founders, the successors and non-family members. Shandro said not thoroughly exploring each group could lead to misinterpretation from each of the people involved.
  • Fairness is in the “eye of the beholder” and ties into perspective by justifying one’s opinions. Fairness is not the same as equal. “It really needs to be understood in taking in your own needs as a founder and the viability of the farm and if it’s important for the continuance of the farm to continue your legacy,” he said.
  • Change involves lifestyle and comfort. Shandro said it’s human nature to gravitate toward a place of comfort. For example, the dynamics of in-laws’ non-farming and farming backgrounds can affect the family unit. “The impact of that is very important, and an overall changing of the guard regarding suppliers, day-to-day dynamics, the labour component — all of that tied in is a huge issue and the change amongst the community.”

Shandro said most successful succession plans are developed before the founder’s children are in Grade 1 because children’s individual conflict management styles and primary traits have already been developed.

“So, long before I ever enter the farmyard, the success of the outcomes have been credited on what Mom or Dad did when kids were kids,” he said.

Shandro’s experience tells him 27 is the best succession age.

“The mathematics amongst the successor and founder has some meaning,” he said.

“One of my questions is, ‘has the successor spent a minimum three to five years away from the farm to enhance their intelligence, make mistakes and go travel?’ ”

He said families must work through a variety of issues during the process, but the emotional part is more challenging than the financial side.

“I can find you many brilliant accountants and many brilliant lawyers to scope out and firmly identify the needs of the client, but on the emotional side there’s very few because it’s very difficult to get your mind wrapped around that aspect of it,” he said.

The strength of the family unit makes a big difference in how well the succession goes. He said commuication is key and children should know what is in their parents’ will.

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