Transitioning the family farm — that is, passing it to
another owner when you are ready to retire or move on — is
easy. You can do absolutely nothing and I guarantee the farm will
still transition. The trouble is it might not end up in the hands
of those you intend and you might destroy family harmony as a
result. You might also not enjoy the retirement you are hoping
The alternative to all of this is to start the planning process
early so you can create a fair, equitable and workable plan that
meets the needs of all involved and generates consensus about the
Starting the process early still doesn't make it easy, and
the result may still be family disharmony. But even though you
can't necessarily control the outcome, you can do a few things
to positively influence the transition process.
The importance of relationship capital
One of the most important factors in successful transitions
(where "success" is defined as consensus on the way
forward) is the family members' relationships with each other.
This "relationship capital" includes trust, loyalty,
positive attributions, benefit of doubt, goodwill, grace,
forgiveness, commitment and stewardship. One of our greatest
challenges as professional advisors is when we are tasked with
creating a transition plan for families who don't have this
So what can be done about this? Well, building relationship
capital begins with communication and with the family developing
its values, vision and mission early on. These things don't
need to be formal statements to begin with, but they should be
intrinsically understood by all family members. Families should
also manage expectations and create some rules about inclusion in
the farming business.
To make the transition process easier, you need to start the
planning process at a very early stage and focus on the family, on
managing expectations and on communication, particularly in terms
of storytelling and conversations that establish values and create
If it's too late to get that early start, then make it a
priority now. It is always possible for families to change their
behaviours in a way that will lead to successful outcomes. By
creating a statement, a set of protocols or even a full
constitution, families can improve their relationship capital and
create the right atmosphere for a smooth transition.
In the end, engaging in the process of transition planning and
recognizing that the process is as important as the outcome will
help families see the value and take the first steps.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
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