Trust is key to managing a family farm

Dennis Foster Special to the Farm Forum
Farm Forum

I am going to veer slightly away from my planned topic for this month and get into some talk of trust. I am not referring to the confusing type surrounded by all that high-priced lawyer language. But rather than a cold, dry piece of paper, the term as it relates here is the trust you have in other warm bodied, breathing humans. Like it or not, we all have to deal with others on several levels to navigate the often muddy waters that form our lives.

Owning a business compounds matters as you have many more layers of people to deal with. Planning on what to buy and where to put it in an effort to produce something to sell amounts to a juggling act with perhaps a dozen or more balls in the air at all times. We are talking large sums of money here and avoidable mistakes that are made can quickly add up and prove not just costly in a dollar’s figure. Continual mistakes can put the whole family farm at serious risk.

Note, I said family farm and not just farm, agribusiness or any other of the terms that can be applied to your business. For nearly everyone out there, family is the key element involved. Folks tend to make sacrifices for those they love. It is rare that accumulating money is the sole motivator. Money is simply the means to ensure that those coming after you can continue the legacy. Fostering their appreciation for and truly enjoying what you have been working at for your entire life.

That being said, the trust factor now comes down to trusting those you work most closely with. Whether they supply you with good or services. If you can’t trust an implement dealer, the relationship is done sparingly and with some trepidation … if at all. If you could not trust the advice of your crop consultants, this relationship would soon end. Most farmers are really good at this. It’s what they do. A successful family farm amounts to basically a sum of numerous decisions that are made through planning as well as on the fly as conditions can and do quickly change.

The same is equally true as it relates to your estate planning needs. Only the stakes are even higher. We are not just talking the outcome of one growing season here. But rather, the eventual outcome of generations of decisions. Both good and bad. As well as all the lessons learned through experience (hard won wisdom) then passed down and prove as important as acres transferred. A common goal amongst farm families is to pass down the family farm fully intact and in most cases, considerably better than when they took over the reins.

This is where the true measure of trust comes into play. What sources can you trust as it relates to information on the subject? Can you trust that the government will have tax codes in place at the time of your passing conducive to not prove to be cripplingly costly? Here is a stumbling block for many: Who can you trust for advisors? Financial advisors and attorneys alike rank about as high as a dentist on most folks list of favorability. All are educated professionals and certain characters wield the power to dish out a great deal of pain. Or, the ability to substantially relieve and prevent unnecessary pain. Providing you work with the right ones.

I have raised lots of questions here. Hopefully it has inspired some serious thought. I will attempt to provide some basic answers for you in next month’s installment.

Dennis Foster has been helping families with financial and estate planning needs for 25 years. He welcomes comments and questions and can be reached at 605-887-7069 or dennis@nvc.net.