Estate planning specialist says families must recognize that everyone involved in the process has different perspectives
LACOMBE, Alta. — When farm families need strong medicine to help solve their farm estate challenges, they call the Farmacist.
Reg Shandro has talked to farm clients for more than 20 years, helping to find the correct remedy for a successful farm transition.
Shandro has broken his estate planning into four themes — perspective, fair, choices, change — realizing siblings can be raised on the same farm, but their travel, life experience, age, career and other influences shape their perspectives and how they see the farm.
“All your children are not the same, and their perspective shapes how they listen and understand. Our filters determine that. Perspective weighs heavily on what reality is. Perspective of reality is very different from what reality is.”
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Shandro said everyone’s different perspectives aren’t wrong, but there needs to be a realization that each child’s perspective shapes their understanding of what is happening.
“People tend to see what they want to see.”
Unless there is only one child, parents must be creative in trying to be fair to their estate planning.
As part of the estate planning, it is compulsory for Shandro’s clients to complete an estate distribution worksheet with all the family’s assets minus liabilities and differentiate the farm and non-farm assets like life insurance or condominiums. Each child is allocated a column and the assets and their value are placed into each child’s designated column.
Add in previous presents of vehicles, university tuition, machinery and other gifts before inspecting the columns. Shandro asks each family if they would be happy with the division on the list as it stands, or should there be adjustments? It is impossible to have a discussion on fairness in estate planning without looking at the real value of assets, and not guessing at what they think is fair, he said.
“Now, there is economic validity rather than just guessing. You can take a look at this and start to modify the columns. What percentage and how much more or less would each child get? It is the beginning of the understanding of fairness and how much each child will get in dollars.”
Shandro said the importance of keeping the farm intact and continuing the family legacy will influence what is financially fair and begin the equal distribution of the farm estate.
“The less the legacy is important to you, then the more the pendulum swings towards equality.”
Shandro said estate planning is not easy but choices need to be made.
“When choices are made, the family can be paralyzed because they worry it is not the right decision. There is a right decision, a wrong decision and no decision. No decision is the most common decision.”
The choices start with what you want to do and how you want to get there, he said.
Sometimes the worst thing that happens is that nothing changes.
“People are not designed to go to a place of discomfort. They short circuit to a place of comfort. Estate planning is a place of discomfort.”
Controlling the change with planned changes helps moderate the shock, anger and rejection that may be felt and family discourse is minimized. Focusing on agreed facts reduces the conflict and helps families move forward toward a common interest.
“When there is no common interest I have to declare it is irresolvable. If there is no overlap or common wants, it is irresolvable. Some of the farm succession plans are just not resolvable.”
Shandro said there are three pivotal points to succession planning: head, heart and wallet. The heart is not quantifiable, the head is the story and the wallet is based on facts.
“The heart trumps everything else. I have clients with millions of dollars that can’t stand each other.”
