When you mix business with family you get another level of complexity involved with running a family business. Each family has a unique way of operating, a lot of times controlled by the elder family members. What happens to management when the elders are gone?
When creating an estate plan, do you leave the farm assets equally to all the children, or do you give the son or daughter who works on the farm a larger portion?
If you leave land equally to the children, is there a danger one of them will force the others to buy his share or force all the land sold? If that is a possibility, do you have life insurance and a buy/sell agreement to cover the possibility?
Lance Woodbury talks about these issues in his article “Family Loyalty Can Lead to Business Turmoil” in November issue of Progressive Farmer. Don’t rely on family loyalty alone to ensure your business succession plan will work. Create your will, trust, and businesses succession plan in writing with your estate planning attorney, accountant, and financial planner.
More importantly, include your family in the planning so everyone knows what your intentions are regarding the family business when you are gone, and what everyone’s role will be.
Reference: Progressive Farmer (November 2017) “Family Loyalty Can Lead to Business Turmoil”