Talking succession planning with Annessa Good

As a young woman and the daughter of a well-known farm transition consultant, Good brings an interesting perspective to succession planning

Annessa Good refers to the transition process as a roller coaster ride and it is quite the ride, she says.

If anyone should know, it is her. Not only is she a transition specialist in southern Alberta with Farm Credit Canada (FCC), but she is also the daughter of another well-known transition consultant, Merle Good. Prior to joining FCC she had worked alongside her dad at GRS Consulting.

She has clear reasons for choosing such a career path.

“I am proud of Canadian agriculture and want to make sure it carries on,” Good says.

The financial viability of operations is a focus, as well as the transition process. One of the biggest hurdles she sees is the high land values and how founders of the senior generation try to make the division fair and equitable. But fair and equal are not the same thing.

“The high values of land have skewed the equation of trying to have equal inheritance for both farming and non-farming children,” she says.

One strategy to handle this can be for a contractual agreement with the children that allows the farming child to lease the land owned by the non-farming child. If a quick flip or land sale is a concern, Good suggests a mortgage that designates proceeds will be shared with the non-farming children if the land is sold within a certain time frame.

Transformational wealth can be another tool where non-farming children are given some of their inheritance earlier, when they can use it for education, home purchasing or other business ventures.

“We have to look at new ways of modelling business relationships,” she says.

Good brings the younger perspective to the table, but after growing up listening to her dad’s stories, she also has an idea of the senior point of view. The 5 Ds of divorce, disposition, death, debt and dementia are some of the issues farm families have trouble talking about. But many know they can happen.

“It is important to have clear, open communication,” she says.

Good also recognizes a difference between succession planning and estate planning.

“Estate planning is wills and life insurance.” The transfer of business management is another and includes tax and business structure planning and training of the successor.

One of the issues that Good has observed in her new role is “off-farm kid favouritism.” The off-farm kids are not around as much as those on the farm. Sometimes when they come back, it is treated as a special event. They are not there during stressful times and the parents may have a different way of relating. It is easy to take family relationships for granted, especially those between people who are often together.

Communication is another important piece that needs to be talked about. How effective is the communication? How do we capture and share the knowledge that is in the farmer’s head? Good says that “unspoken expectations are the silent killer of the family farm.”

In many cases, the younger generation has left the farm for a few years to pursue an education or gain other work experience. Good suggests that a more formal business strategy can be followed when they return, such as a job application and accompanying job description, not “here is a pitchfork, you know what to do.”

She recommends developing a reference binder with operational procedures. Scheduling time off and time management is another area where she sees differences arising between the generations. Technology adoption also fits into this category. She sees families using group chats to share information and also suggests farm planning calendars.

She wants farm families to ask whether they are working on a promise or whether there is a clear pathway to ownership for the younger generation. Families should keep in mind that “Facts are negotiable, perception is reality.”

Another big issue that is not being talked about is the size and scale of today’s operations. Stress and debt that accompanies these operations are not often being shared with the younger generation.

“Succession issues are not always easy to solve. It is hard dealing with family and business, but it also brings the most joy and satisfaction, which is why we do it. My goal is help have an open, frank conversation for vision achievement.”

Good is also a graduate of the Cattlemen’s Young Leaders Program (CYL). Applicants had to compete at the Beef Industry Conference. The application process was a series of long-answer questions, with the actual competition set up in a round-table format. Each sponsor had a table with a question. Participants rotated through in groups and had 20 minutes for discussion at each table. They had to specify areas of interest, stressing financial consideration and ensuring sustainable beef operations. They were then placed with a mentor, attending events and networking. Good was one of 25 chosen and is very proud to have completed the program.

About the author

Contributor

Kelly Sidoryk ranches with her family just west of Lloydminster, Alta. She consults in a number of areas including succession planning and holistic management.

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