Generations & Family Partnerships – Initiating the conversation opens the door for smooth estate planning
Riverton – “Estates are messy,” commented Cole Ehmke, University of Wyoming Extension specialist on Feb. 12 at Fremont County Farm and Ranch Days in Riverton.
He encouraged ranch and family business owners to centralize all of their estate information.
“That usually means putting it in a file folder or a filing cabinet, keeping a listing or having a professional like a CPA or lawyer who is closely involved,” he stated.
Including family members and talking with them is also important, so they know what plans have been made and can find the information when they need it.
“We don’t want to surprise someone with all of the assets we are going to give them or not give them,” he commented.
Ehmke urged planners to be inclusive in their conversations and to over-communicate.
“Will the planning involve kids, cousins or step-kids?” questioned Ehmke. “What about people who are not physically here but are interested because they are family?”
Keeping discussions open allows everyone to have the option of being involved and having their opinions voiced for the future of the estate.
“There could be a lot of potential people involved, so think broadly about who should be at that discussion,” he suggested.
Ultimately, the owners of the estate should be looking our for their own best interests, but planning will go more smoothly if they do not assume they know how everyone feels about the business.
“We should make the final decision because it is our estate and it’s our property, but we would be foolish to not get some input on what people are interested in,” he explained.
For example, perhaps a new spouse has married into the family and sees the operation from an outside perspective.
“A spouse comes in and they don’t understand, so they start asking questions purely to understand the family,” he said. “What happens if no one has really talked about who is going to own the business, work in it or make the decisions?”
In some cases, there may be plans that have been made but not shared with the family, such as old wills or stock portfolios.
“Maybe the planners now have more assets or perhaps land values have gone up,” he stated, pointing out that it could affect how assets should be handled.
Family members should be clear about their positions and ask questions so that everyone understands what values and ownerships are at stake.
“Put it softly,” Ehmke warned. “This is all about managing emotion.”
For example, he suggested that a potential heir might initiate a conversation by saying, “We have noticed that you don’t have a will. If something ever happened to you, what would you want us to do?”
Planners should do their best to be honest and fair.
“Fairness is sometimes tricky, because we all have our own perspective of what fair is,” he noted.
Beginning the family conversation is the first step, and communicating clearly and openly is important.
“We have to say things multiple times and in multiple ways before people really absorb a message,” he continued.
In advertising, promoters say that messages have to be repeated many times before an audience absorbs the message. It is the same with family conversations and business planning, Ehmke said.
“Sometimes we have to be really straight-forward and direct because some people are just not ready to absorb a message,” he added.
“Start the dialogue,” Ehmke said. “Gather some information from an attorney, an accountant, your kids, and spouses.”
This article is the second part of a multi-part series on transitioning the ranch to the next generation. Look for more about family and generations in agriculture in future editions of the Roundup.
Natasha Wheeler is editor of the Wyoming Livestock Roundup and can be contacted at firstname.lastname@example.org.