Let’s just say that you and your spouse carefully went through all of your planning and identified the goals that you had in mind with your estate distribution. You carefully put everything together for your situation and when you got done, you said, “I like this and I’m happy with it.”
You could have just called it good, but you decided to run it by a few family members. Keep in mind that you’ve taken careful consideration for your cash flow, as well as your farm heirs. You factored in sweat equity, risk, fairness, values and discounts. You worked with several advisers that all agreed that your plan made sense. You like the plan and the next generation to farm can make the plan work.
So now you are asking a family member that has been off the farm 20 years what they think and they simply reply: "I don’t like it."
Whoops, now what?
Of course, they would never just come out and say "I’m greedy and I would like more." They would rather say "I don’t like it" or "It’s not fair" or "It’s not right."
Pause. Pause. Pause. Whatever you say next is going to be important.
If you had this happen to you, how would you respond? Here are a couple possible choices:
1. Would you clarify that you were not actually asking what they thought, but rather out of courtesy, telling them what you had done. You don’t not attempt to explain anything and you would go on to tell them that no further explanation would be coming and your mind was made up.
2. Would you frame the discussion by stating the goals, identifying the issues and therefore attempt to logically explain why you did things the way you did.
3. Would you ask for their input and how to change things to make it better for them. This opens the door for changes to be made.
4. Would you back pedal and suggest a family meeting to open this up to all to discuss everyone’s view point?
5. Would you melt down and decide to abandon the plan entirely for fear of disappointing someone?
So what option would you choose? If you do anything other than implement your plan as it was laid out, you will have officially begun your own family auction. Anything that is changed opens the door for a negotiation process on everything — something that could go back and forth and ultimately create even more dissent. The end result will be no plan at all, or a plan that is far from your original intent.
I can assure you that in most cases, it will not create a higher level of happiness or family unity.
Sometimes I am completely amused and confused with grumbling heirs. This scenario took place with a family I was working with. Dad and mom had clearly identified what they wanted to have happen and had spent a lot of time on this. The farming heir could make the plan work, but a single child dissented.
In this case, grumbling heir was set to receive well over $1 million from their parent’s estate that they had done nothing to help grow. In the child’s own 30-year working career they had accumulated a $25,000 IRA and a still had a mortgage on a $125,000 house. But for some reason they were not happy with the $1,000,000+ they were getting from their parents for doing nothing.
Unfortunately being a responsible parent does not always mean that the tough decisions are over when the last kid gets out the door. It often requires doing what you think is right, even if it's not popular with all the kids.