How to Have Better Communication with Your Farm Lawyer

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How to Have Better Communication with Your Farm Lawyer

by | Oct 25, 2016 | Uncategorized

How to Have Better Communication with Your Farm LawyerLawyers are the brunt of many jokes, but if you want to have a great succession outcome you better have a great communication plan with your farm’s lawyer!

Ontario lawyer, Sarah Jacob shared her experiences at a CAFA (Canadian Association of Farm Advisors) update. Would you like to save time and money in front of your lawyer?

One of the great difficulties facing farm families is that assumptions are made about what everyone wants and needs. Jacobs encourages clear communication to alleviate unexpected conflicting desires, needs, and expectations.

Questions to Ask Yourself

What does each person want?

Have you been open with the next generation about finances and your plans? Jacobs says likely not!

Do you have life insurance, what kind, and what are the payout terms? Farmers hate to waste money, but Jacobs believes as I do that life insurance can solve many problems, with cash flow and estate planning to deal with the fairness to non-farm heirs issue.

Have you thought about your children’s interest or commitment to farming? What is your deadline for a response of dedication to coming back to the farm? For us, we told our son we needed to know by the time he was 27 if he was committed to partnering with us.

Do you foresee conflict amongst the generations or siblings? How are you prepared to deal with this?

What inheritance obligations have you signed up for? Jacobs wants to know what promises the parents have made to any of the adult children. Promises create resentment and a sense of entitlement.

What do you owe your “ex”? Jacobs mentioned that people tend to forget past painful contracts and commitments such as life insurance benefits going to an ex-spouse.

“Decline is not fine,” says Jacobs as she reflects on the fact that many folks have a widespread reluctance to engage in planning for transition because of existing or inevitable decline. We all need to face the fact that planning helps decrease future conflict, makes us more tax efficient and decreases the stress of “not knowing.”

[Tweet “#Farmers, here’s how you can avoid #succession frustration by better communicating with your #lawyer.”]

Do you have a favorite child? Jacob thinks that most parents do. How does this bias your planning, or keep you avoiding conflict?

How much do your children’s opinions matter to you as parents? Some folks take an insular approach and make decisions as a couple, while other families want to have a clear understanding of the opinions of the entire family. As a farm family coach, I think you will have great success when you are clear about your needs and wants as a couple, and also survey the needs and wants of your adult children. No secrets and no surprises is a great way to have better transparency for great planning.

Do you have a clear picture of everything that you own? Farm assets may be in a neat inventory list, but what about the cottage, boat, non-farm real estate, financial portfolio, and shares in other ventures? Be very clear about your net worth statement, and remember to include all your non-farm assets. Review your asset base and refresh the whole family’s memory.

Some of Jacob’s strategies may be hard for you to swallow but should be considered.

5 Things to Consider

1. Get life insurance when you are young and premiums are more reasonable.

2. Look at the value of non-farm assets.

3. Accept that various inheritances will not be financially equal and remember to honor your promises for time and effort.

4. Talk to your children!

5. Ask better questions and do not assume. You do not know until you ask.

Find your will and call your lawyer for an update. Make sure you have an alternate for your power of attorney now that your adult children are farming with you. We have our son as an alternate in case we are incapacitated in a car accident together as a couple. Feel less stressed out knowing that you are taking steps to get your affairs in order. Have a family meeting to scout out the expectations of all of your adult heirs and hear their perspectives alongside their spouses. When you all meet in the same room together at the same time, there is nothing lost in translation!

Lawyers are professionals with a great deal of experience and wisdom. They have seen many successful scenarios for planning and can help you create a great plan for a transition that meets your unique needs.

Lawyers cannot read minds, so you need to be prepared when you meet with them with the best awareness of all the needs, wants, and assets clearly outlined. Do your homework long before you meet in the lawyer’s office, and save time, money and frustration by being well prepared to address your unique circumstances.

If you are fearful of costs, ask for a quote or range of fees for services. Be clear about the timelines for the preparation of documents. Good communication with your professionals is a two-way street. Ask for clarification if you don’t understand what your lawyer is telling you. There is no such thing as a dumb question, just ask them to explain things in a different way.

When you find a great lawyer who communicates clearly, tell your farming friends. The lawyers who are part of CAFA have a passion for serving farm families well.

And finally, don’t procrastinate. “You cannot start planning too soon,” says Sarah Jacobs. If you are in a second marriage, get independent legal advice and use prenuptial agreements. Remember you get to share with your advisors “what you think you would like,” and you need to know what that is before you visit the lawyer’s office!

Follow Elaine on Social for More Helpful Farm Family Advice!

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