Succession and estate planning for farms can be difficult for families deciding how the business will be transitioned to and run by the next generation. University of Maryland Extension (UME) is now offering Succession Coordination Sessions with a trained facilitator to assist in guiding that process and creating a path forward for both the business and the family.
The new service allows participants to work directly with Alexander Chan, faculty specialist in family and consumer sciences, and one of only three people in the state of Maryland qualified to mediate these types of specialized family dynamics within the agricultural community.
“Oftentimes there’s tension between the owning generation and the inheriting generation,” said Chan. “I’m there to make sure that they can express themselves, that they’re heard, and that the whole family is working together towards a solution for the future.”
The Succession Coordination Sessions provide tools and structure for families undergoing the transition planning process, which typically occurs when major changes occur in a farm business or within the family itself, such as the owning generation going into retirement.
“Families need to know where they stand, where they want to be, and how they get there,” Chan said. “The succession coordination process involves materials and exercises that I can share, as well as discussions I can lead, to help the family figure out the answers to those questions.”
Common factors affecting families during these times are competing visions for the future of the business enterprise, what role the retiring generation will continue to play, and what financial choices need to be made around the decisions agreed upon. The Succession Coordination sessions provide a structure for families to plan financial buckets for each generation and their needs, which could entail the amount needed to keep the business running, the amount needed for the retirement of the owning generation, and the amount needed for any planned inheritance.
“This is a difficult conversation, especially when there’s disagreement and people want to avoid conflict,” Chan said. “So they don’t talk about things until there’s an urgent situation, like someone’s dying or already dead.”
Chan encourages families to engage in, or revisit, these conversations anytime there is a change to factors affecting the business or personal aspects of the farm and ownership. This not only includes when a generation is ready to pass on the farm, but whenever a decision is made that changes the dynamics of the enterprise or the family, including when a family member returns to work on the farm after being away, or when a decision is made to change land usage, such as selling a plot or committing a portion to conservation practices, or even a change in the abilities of the owning or inheriting generations. “Anytime there is a change, there is an opportunity to have a discussion about your succession plan,” he said.
Maryland farm families interested in participating in Farm Succession Coordination sessions can learn more at https://extension.umd.edu/resource/farm-succession-coordination/ and fill out the intake form to get started. For questions, contact Alex Chan, UME specialist, at 301-405-3296.