WINNIPEG – It can take a decade to plan and activate a family farm transfer.
That’s why parents and children should begin talking early, say two Manitoba home economists. Donna Hastings and Doreen Gardner Brown teach a farm transfer course for the Manitoba agriculture department. They offered a shortened version at the Manitoba Farm Women’s Conference.
Leaving enough time to work the process through is crucial, said Hastings. If a parent suddenly becomes ill and can no longer farm, one or more of the children may not be prepared to quit their jobs to take over. Another advantage to a long planning period is that disagreements in the family may be worked out and solutions found to satisfy all.
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Both sides must ask themselves some probing questions.
Parents must decide how much management control they want on the farm, whether they can work with their child, how the non-farming children will be handled and whether the transfer financing allows them to retire in the style they want.
Can child afford to farm?
The child taking over must ask if he or she really wants to farm, can he afford to farm under the deal worked out and if he and his spouse can handle the lifestyle.
A survey of Manitoba farmers showed 81 percent of them had a will, but only a third of them had an estate plan.
It’s difficult to get started because neither the parents nor the children want to deal with “this mortality issue,” said Hastings.
Gardner Brown said it took 40 years to build the farm and people must leave time to hand it over.
“If the answers don’t come right away, read about it and ask others and the experts how people have resolved this.”
Lawyers, accountants and bankers used for the transfer by the family should be specialized so they understand all the legalities, Gardner Brown said.
Among the information needed for a successful farm transfer are: net worth; retirement need; keeping the farm intact; business arrangements put in writing; tax laws; maintaining family goodwill; being fair rather than equal to all; any legislative constraints; and adequate records.
