There are certain issues within the succession planning process that some families find difficult and may ultimately slow or stop the succession planning process altogether.
They are often referred to as the “soft” issues and can sometimes be more difficult to deal with than the “hard” issues such as taxation.
Families can prepare to address these issues by recognizing that they are either a problem now or will potentially cause problems during the succession planning and implementation process.
Families are less likely to encounter problems that stop or slow their progress if they are prepared to deal with them as they arise, or in some instances, before they arise.
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The lack of accountability can be real or perceived.
Many plans are derailed because no one feels responsible or accountable to keep the process moving forward.
It does not have to be solely one person’s responsibility, but obviously a successful outcome is more likely if fewer (one or two) people are “driving the bus.”
Too many assumptions can be made about who is in charge, which can result in things falling through the cracks.
At the least, this situation can derail the process and cause frustration. At the worst, it can result in conflict and financial costs, such as when tax issues are not optimally managed.
Many people don’t want the hassle of nagging their family to attend meetings or complete succession planning duties, but this is exactly what is needed.
Accountability does not have to be one person’s job, unless of course he or she is willing to take on the role. One option is to have the family decide who will be responsible for certain elements of the plan, such as contacting advisers and scheduling meetings.
Whether one person is in charge or specific individuals are assigned specific responsibilities, it is critically important to clarify roles, authorities and accountabilities during the planning process and eventual transition.
Accountability to a third party, such as a consultant or adviser, is a good option when families don’t or can’t take on the responsibility.
The challenge of active and non-active children is not about how they will be treated in the final succession plan but how they will be involved in the planning process.
Some families will want all children at all meetings and others will choose to keep non-farming children in the loop when they decide it’s necessary. My philosophy is to be more inclusive, but there is no right or wrong approach.
An invitation to the non-farming children usually opens communication by keeping them informed and giving them the opportunity to voice concerns and opinions. It can also help dismiss any myths they have, or might develop, about the parents’ relationship with the farming children.
However, many personal and financial issues come to light during the planning process, and individuals’ privacy wishes need to be respected. This can even mean that some family members do not actively participate in the planning. It’s usually the parents’ call.
Many families experience situations where one or more family members actually refuse to participate in the planning process. There can be several reasons for this, whether it be immaturity, geographic distances or a lack of interest. Participation cannot be forced.
In situations where a family member is not participating, it is strongly recommended to continue to include them in the process. You can do so by inviting them to meetings, giving them related information and keeping them informed of decisions.
This eliminates the possibility of a change of heart in the future and reduces the risk of conflict.
