Alberta family had difficulty developing a succession plan on their own until they decided to hire a retirement expert
Hiring a professional farm retirement expert was key to a successful farm division with all parties still talking to each other at the end, said Carol Penman.
For more than 50 years the three brothers, Bev, Jim, and Donald, and their families had a successful mixed farm of grain, hogs and cattle south of Czar, Alta.
But when the youngest brother, Donald, died in 2012, a plan needed to be put in place to ensure the farm distribution was fair to the remaining brothers and the new widow.
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“This forced us into making some decisions,” said Carol, whose husband, Bev, had wanted to continue farming.
“My husband had no intention of retiring at that time,” said Penman of the changes made after the death in the family.
The family had made a few half-hearted attempts to create a farm succession plan while all three brothers were alive, but no one had the knowledge or skills required to put it in place.
“It was just too scary. They didn’t want to go there. They did a few elementary workshops and that was it. If the subject came up they couldn’t figure out how to make it work and at that time they didn’t really want to make it work,” said Penman.
After the death of the brother, the family had no choice but to create a succession plan. With the help of The Farmacist’s Reg Shandro, plenty of meetings and a desire to make it work, the farm transition was successful.
Because of Shandro’s expertise and his access to accountants and other key advisers, the family was presented with options for a succession plan and explained how each option would work.
“He presented us with a number of different options to make the transition work. Our family would not have ended up in this position without that knowledge. In the end it won’t be exactly fair. You have to come up with something that would work.”
Shandro recommended an accounting firm that specialized in farm succession and could explain how each option would work, taxes paid and ongoing financial benefits.
“We wouldn’t have sourced out a different accounting firm. He just made such a difference. He spoke about how this was going to work financially. One of the greatest concerns is how it is going to work financially.”
Having a neutral party guide the discussions and know when to bring each party into the discussion helped keep the process moving forward.
“It took a lot of work. Rural people are quite stubborn and not great for change. We had to do a lot of things to make it work. They still didn’t want to make a change. It took some courage and it was a huge learning curve for all of us,” said Penman.
Paying for specialized lawyers, accountants and other experts may be expensive, but Penman said they were key to having the transition done efficiently and properly.
“It is really important to make an intensive effort to invest in the professional businesses and the professional people that are available. In the end it could save the things that are worth a lot more than money.”
Carol and Bev continue to live on the family farm near Czar, Jim and his wife, Rita, live on a separate family farm near Red Deer and the widow, Janice, has moved off the farm into Wainwright.
With retirement now a reality, Carol said she and Bev make a conscious effort to enjoy life and still be productive without the daily routine that comes from actively farming.
As well as a plan for farm succession, Penman said it’s important to have a plan to stay active as an individual and a couple.
“For people that are even toying with the idea of retiring, find some interests and hobbies that involve you as a couple and some activity that is physical activity.”
