Duguid, now 72, who raised purebred Angus with his father, sold off the last of his herd — about 130 head of cattle — last March. After more than five decades of raising cattle, it was a significant moment in his life, but also part of the next step in his succession plan.

“Succession planning is kind of like planting trees,” says Duguid. “It should have been done years ago.”

Duguid admits that one aspect of kick-starting his succession plan is his age. He decided it was time to slow down a little bit and let a younger generation take over.

Duguid has raised cattle alongside his son, Scott, near Arnes, Man., for almost 20 years. A second son had raised cattle with him in the early 2000s, but exited the industry over time after the BSE crisis in 2003.

“I have my son, but he’s also got three kids all very active in cattle” says Duguid. “Time to let them all do their thing, and I’m going to go do mine.”

The key to keeping his succession plan on track was hiring a consultant to navigate the process. While a number of financial institutions and organizations can guide people in a succession, Duguid ultimately chose to go the private route on a recommendation from a farmer friend.

“The first thing we had to do is find an accountant who would understand not just farm families, but money,” said Duguid.

With the price of cattle and land values at historic highs, asset values have skyrocketed since the early days of his career. The last thing Duguid wanted was for a large chunk of his hard-earned work to go toward taxes.

“Accountants are very valuable in this step,” added Duguid. “They know the ins and outs of what you’re trying to accomplish.”

Duguid highly recommends hiring a consultant for anyone in the cattle sector who may be nearing a point of succession. He admits a consultant won’t always make for smooth sailing, especially when it comes time to talk with family members.

“Between us and the consultant, then it got to the next stage … which was the hard part for me,” said Duguid. “The hardest part is accepting what you’re doing.”

Losing control of his farm, something he’d worked his whole life for, made Duguid question his direction at times. But he admits that taking over the farm is ultimately what the next generation wants, and maintaining the integrity of his operartion without having to sell land was valuable in itself.

It’s a legacy that led to one of his favourite memories of raising cattle. He was at a cattle show several years ago with his granddaughter, who won grand champion steer with an animal they had raised together. It was an emotional moment for Duguid. He had won the same award 50 years earlier.

“I showed her that and she had pretty big eyes,” said Duguid. “I was pretty proud that day.”

Changing demographic

Tyler Fulton, 50, cattle rancher and president of the Canadian Cattle Association, says it would be optimistic to think that a third of the country’s cattle producers have an active succession plan in place.

After finishing high school, he left the farm to earn a degree in agribusiness at the University of Manitoba and had an off-farm job for 25 years. It was the cattle business that brought him back to the family farm near Birtle, Man., in 2006.

“I always had a passion for cattle … much more so than for the grain sector,” said Fulton.

His operation, Tyton Farms, raises mother cows and backgrounds steers and heifer calves. Fulton estimates the farm operates about 1,000 head of cattle at any given time.

Succession planning is something he’s been exposed to his whole life.

“It’s been three generations now that we’ve moved through a fairly structured succession plan,” said Fulton.

The family farm was started by his grandfather. It was converted to a corporation when the farm was passed down to his father.

“That structure actually made it easier for my wife and I to acquire the farm from my parents,” said Fulton, adding that the transition took place about four years ago.

With the cattle sector currently as profitable as it is, Fulton admits there is a major challenge among the sector’s demographics.

“The average age of a cattle operator is older than really any other sector in ag,” said Fulton.

He feels this is partly due to the BSE crisis that hit Canada’s cattle sector in 2003. A large segment of his peers simply did not come back to raise cattle because the economics did not support it.

“That’s a challenge … but arguably it’s an opportunity for the youth today,” said Fulton.

He admits that it’s an interesting dynamic for an up-and-coming rancher just starting out.

“When you’re at the top of the cycle, you’re also incurring the highest cost for, really one of your largest line items in your balance sheet, and that is your breeding cattle,” said Fulton.

However, with limited growth in the cattle supply on both sides of the border, he expects high cattle prices will be around for a while.

“I think the high prices are are not always going to be around with us … but I think for for at least two or three years we’ve got a little bit of a buffer before we can see some downside.”

Even in a time of record cattle prices, successions are never easy. They require skills from financial, accounting and strategic planning to people management. If conversations are not handled with care, successions can quickly derail.

“There’s so many aspects to it that make it complex … and then you throw family dynamics into it and it can be extremely challenging.”

Preparing the next generation

Connor English, 27, raises cattle at English Ranching near Rivers, Man.

He grew up on a mixed farm, and his love for agriculture, particularly on the cattle side of things, was instilled in him as a boy.

“I just had a love for it ever since I was young,” said English. “I loved coming out to work with animals, especially, and just felt really good about it.

He’s the fifth generation on the family operation, and with two young boys of his own, he’s excited that the potential for a sixth generation is on deck.

English’s path back to the farm began with a two-year diploma program at Lakeland College, on opportunity that provided him with hands-on farm management experience. He met new, like-minded people along the way before he returned to the family farm in 2022 to work on a neighbouring operation.

Similar to Fulton’s observations, English added that a lot of producers left the cattle industry over time due to BSE, likely upsetting many transition plans in the process.

“It was always, to be honest, kitchen table conversations with Mom and Dad growing up to find a job off farm because it is tough going,” said English.

However, in those moments, English says that he always put up a fight for life on the farm. He didn’t know how that would look, but he knew that was what he wanted.

English feels that succession conversations are a critical point for family farms.

“It needs to be brought up a lot earlier than most operations do have it,” said English. “It’s something that we need to continue to develop a process to go through.”

To help in that effort, English has been learning from other producers in the industry about how they go about succession planning.

“I think it needs to start right when you’re a teenage kid,” he added. “It needs to be in a position where you know that the farm is there, but seeing opportunities to be away from it if you want to be.”

Having a plan in place for family members who want to gain skills away from the farm should also be considered.

“I think that it’s very important to go elsewhere and find work, if that’s an option to do … just to kind of pave your own path and and then return to the farm when the time is right,” he said.

English admits that succession planning gets pushed aside among his family as well.

“It shouldn’t just be a once a year, have a half-an-hour meeting about succession or what the next year might look like,” said English. “It needs to be talked about a little bit more often.”

This leads to what he says is the biggest jump when it comes to succession planning: the family conversations.

As for his two young boys, English says he wants a process set for when his kids are of age and if they have an interest in the farm. If they don’t wish to farm, that’s fine too.

“There’s no force in it … but if they have a love like I do for a business like this, I want to be in a position where we have processes set up for them to be able to succeed entering the industry.”

The post VIDEO: Three Manitoba cattle ranchers on what succession planning really looks like appeared first on Canadian Cattlemen.

Think of the five people you spend the most time with, other than family. How many are either 10 years older or younger than you?

Chip Conley with the Modern Elder Academy has been exploring this concept recently. “The Organization for Economic Co-operation and Development estimates that building multi-generational workforces, and giving older employees greater opportunities, could raise gross domestic product per capita by 19 per cent by 2050,” he writes. He cites another survey from LinkedIn where one in five generation Z employees have not recently spoken with anyone over 55 and 40 per cent of the older folks say the same about speaking with the younger generations. (Gen Zs were born from mid-1990s to early 2010s.) Conley says the home is one of the few remaining areas where people of different generations interact.

Working together on the farm or ranch is an amazing example of how learning happens and knowledge is passed between generations. When I think of our young grandson’s knowledge of how an electric fence works and the importance of having a fence tester, I see he understands what many do not. He has yet to touch the electrified fence, but he knows the importance of it in our cattle operation. A true example of the “learn to do by doing” concept taught by 4-H.

Those of us in agriculture may have a different problem than the rest of society: trying to encourage the senior generation to move out of active management and the younger generation to take the reins. At many of the conferences and events I have been to this season, there is a wide representation of ages and genders. At the recent Holistic Management Canada conference, the children’s program had over 30 participants. It was a fantastic session led by students from the Lakeland College Range Team. The activities were varied and engaging, with a farm and ecosystem focus.

During the conference, producers Gabe Brown and Don Campbell discussed the concept of identity loss for farmers and ranchers as they consider turning over the operation. It is exceedingly difficult to understand that feeling of loss when we are not in their boots. Their journey has been very different from that of the coming generation.

Duane Thompson of Tee Two Land and Cattle also spoke at the conference. He shared how the challenging transition from his father affected the process with his own children. The family has had a policy of leaving the farm for a few years before coming back. When their sons came back, they initially entered as employees before working their way up to management and ownership. They have collaborated closely with professionals to put the plan together. He recommends author and farmer Andy Caygeon (previously known as Andy Junkin), as Caygeon had some profound stories that influenced him.

At Lloydminster’s Agri-Visions conference, Andre Poulin of Greenbelt Farms near Wainwright, Alta., spoke about farm transitions. The Poulin family engaged professionals, and developed an advisory council for their multi-enterprise operation to help family members during the transition.

Scott and Alicia Adamson of Makwa, Sask., have spoken about their ranch transition experiences, including in the September 24, 2024 issue of Canadian Cattlemen. They stress the importance of having a direction before meeting with advisors. Initially, when they first went to the accountants and said what they wanted to do, they were met with resistance and told that it would not work. “We just kept saying that it was what we wanted to do, and they (the accountants) needed to figure out how, which they ultimately did,” said Scott.

At a follow-up to a succession planning workshop, one of the participants shared how her family had managed to get the entire family together and intentionally focused on having fun. She believed that before they got into more in-depth planning, it was important to enjoy each other’s company.

These snippets from people’s experiences underscore that each family and operation is unique. Some will say the business comes first and others will say the opposite. They are both right. That emphasis will inform the direction of the transition journey. And whatever the focus, it’s a journey that takes considerable time, commitment and resources.

I am seeing more and more ranchers and farmers sharing their struggle of handing the operation over, which can go a long way to help others in a similar situation. As I have said many times, talking about such struggles is not something that senior farmers and ranchers are used to doing. It requires massive courage and willingness to embrace change.

What does it take to get started? The Beckhard-Harris change equation states that the level of dissatisfaction, the presence of a clear vision and an idea of the required first steps will all influence a person’s openness to change. If one is content with the current situation, does not have a future vision and has no idea of what the next step will be, I suggest the likelihood of embarking on meaningful change is slim to none. However, do not give up hope.

We are learning and discovering more tools all the time on how to come together and create a positive desired future. We are also realizing that breaking large, insurmountable challenges into bite-sized pieces and working on them every day can achieve meaningful results over time.

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

The post VIDEO: The intergenerational gap on Canadian ranches appeared first on Canadian Cattlemen.

I spoke with succession planning expert Annessa Good-Hassard to explore the generational differences and conflicting visions that often emerge during succession planning. She shared her insights about the “builders” versus “progressives” dynamic and emphasized the need for clear communication and being proactive.

Mediating sibling conflicts

Most of the time, parents must initiate critical conversations about expectations and help siblings find common ground. The parents’ role goes beyond setting expectations — they may need to actively mediate or “referee” conflicts that can arise between siblings.

“I call them builders, not boomers, as this generation never stops building,” Good-Hassard says. She adds that the senior generation’s experience and perspective are crucial in guiding siblings through their transition plan, complex dynamics and finding solutions. 

Good-Hassard says that at the beginning of this process, parents must “lead the dance” in succession planning, setting the tone and framework for productive sibling conversations and decision-making. Their role as mediators is essential for overcoming the “sibling hurdle” in passing the ranch to the next generation. However, it is just as critical that parents prepare to step back and let siblings see how, and if, they actually can work and problem-solve together — without the parents (a.k.a. referees) interfering. If the parents have been mediating for years, how can anyone expect these siblings to succeed when the referees are no longer present? This will affect how the business is structured and how the long-term transition and estate plan is crafted to respect these family dynamics.

Sibling and cousin dynamics

Good-Hassard has seen first-hand how the focus on the parent-child transition can often overshadow the importance of navigating sibling and cousin relationships during the succession process.

“Unspoken expectations are the silent killers of family farms,” she says.

One of the key questions she asks families is how many generations they are planning for.

“Are we planning for just the sibling level, or are we considering the future grandchildren (cousin) generation?”

The complexities arise from a variety of factors. Each sibling may have a fundamentally different vision for the ranch’s future. One child may be eager to expand and diversify the operation aggressively. Meanwhile, another sibling actively involved in the business may prioritize a more cautious, lifestyle-focused approach to preserve the ranch’s traditions and stability. These contrasting viewpoints can create tension that, if left unaddressed, festers into deeper conflicts and resentment. Eventually, contrasting opinions may influence each sibling’s income opportunities and operation growth potential.

Adding to the challenge is that many ranch families are transitioning not just the business but also significant land and asset holdings. “If we’re transferring land to a non-farm child as well, a question may be, why does one child potentially get to inherit free and clear, while another child doesn’t?”

She says there’s no right or wrong answer. “My job is to start asking some of those thought-provoking questions.”

Fair versus equal

These questions can lead to heated discussions and resentments, especially regarding issues of fair versus equal distribution. “In society, it sometimes seems that if the off-farm child sells land, they’re a smart investor, but if a farming child sells land, the perception may be that they’re going to be haunted from their parents’ grave.”

This emotional weight of succession planning is deeply embedded in family history, tradition and expectations. Parents often struggle to ensure each child is treated fairly. Yet fairness does not always mean an equal split. While one child may have dedicated their life to running the ranch, another may have pursued a career elsewhere. Should they receive an equal share of the assets despite their differing contributions?

Communication and planning

Good-Hassard emphasizes the importance of proactive communication and establishing clear policies and agreements to navigate these treacherous waters. “We have to be very cognizant of our language,” she says. “I don’t like the word ‘control’ — I like the word ‘protect.’” This shift in mindset is crucial, as it allows families to focus on safe-guarding the interests of all involved rather than trying to exert control over the process.

Good-Hassard suggests assembling a well-rounded team of advisors — including transition specialists, lawyers, accountants and financial planners — to guide ranch families through succession planning. She encourages families to thoughtfully assess their current advisors and, if necessary, expand their team to ensure they have the right expertise. Rather than introducing multiple new advisors at once, which can disrupt family dynamics, she advocates for a deliberate approach that balances fresh perspectives with continuity. Since nearly 90 per cent of family businesses change advisors when the next generation takes over, having a trusted advisory team can provide stability and help avoid common pitfalls in succession planning.

The cousin consortium

One key tool Good-Hassard suggests for operations with cousin consortiums is the use of operational agreements. These formal documents outline the roles, responsibilities and expectations of all family members involved in the ranch. They can also include both farm and non-farm heirs.

“It’s a messy dynamic, because there’s no hierarchy.” Without clear guidelines, she has seen families struggle with issues such as who gets to work for which uncle, or which cousin has the authority to make certain decisions.

Compensation and equity

A critical question with this dynamic is how the junior generation (cousin level) is currently being compensated and how they anticipate being compensated in the future. Does compensation come from the joint operating business, or is the cousin generation compensated from each of their parent’s net income? This can affect family dynamics very quickly, depending on how they are structured.

The cousin consortium agreement helps to establish these boundaries and decision-making processes up front, preventing the kind of resentment and conflict that can tear families apart. Good-Hassard emphasizes that these agreements must be reviewed regularly and updated as circumstances change.

Further to the cousin consortium agreement, Good-Hassard recommends that families establish clear compensation and equity policies. She has found that unspoken expectations around these issues are a major source of tension between siblings.

“We have to start actually to understand what’s going out of the business.”

This includes tracking not just cash compensation but also the value of perks such as housing, vehicles and other farm-related benefits. By making these elements transparent and subject to regular review, families can avoid the kind of resentment that can build when one sibling feels they are being unfairly compensated compared to their brothers or sisters. For example, if one sibling is living on the ranch rent-free while another pays for their own home, the disparity needs to be acknowledged and addressed in a way that is agreed upon by all parties.

Psychological aspects of succession

Beyond the legal and financial considerations, ranch succession has deep emotional and psychological aspects that cannot be ignored. Many ranchers struggle with the idea of “letting go” of the operation they have spent their lives building. This can result in prolonged decision-making processes and a reluctance to fully empower the next generation.

Siblings and cousins also bring their own emotional baggage into the process. Long-standing rivalries, perceived parental favouritism and differing work ethics can all play a role in complicating succession discussions.

To address these challenges, families must prioritize open and honest communication. Regular family meetings, facilitated discussions with a neutral third party, and even therapy or mediation can all be valuable tools in ensuring relationships remain intact throughout the transition process.

Ultimately, Good-Hassard believes that the key to overcoming the sibling hurdle in ranch succession is a combination of proactive communication, formal agreements and a willingness to adapt as circumstances change.

“If we can really prioritize and commit to being proactive, I would say that’s the biggest thing our generation can do.”

By addressing sibling and cousin dynamics head-on, ranch families can avoid the pitfalls that have derailed so many succession plans in the past.

Final thoughts

The transition of a ranch from one generation to the next is rarely a simple process, but with careful planning, open communication and a commitment to fairness over strict equality, families can preserve both their operations and their relationships.

Ultimately, there will be a need for patience and understanding as the younger generation takes on more management duties while the senior generation steps back. So, remember to grant each other grace as families navigate the changing roles and responsibilities within the operation. After all, as Good-Hassard eloquently puts it, “How blessed are we to have a family legacy.”

– Billi J. Miller is a published author, photographer and speaker from east-central Alberta. She freelances from her home office, where she can be reached through her website at billijmiller.com.

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“Our research shows that an average grain farm in Canada, most of which are family owned and operated, will see a tax increase of 30 per cent due to the two-thirds capital gains inclusion rate,” said Kyle Larkin, Executive Director of GGC in a news release, adding “this hike targets farmers’ retirement plans, complicates intergenerational transfers, and threatens the long-term viability of family farms across the country.”

The 2024 federal budget proposed several key changes to the way capital gains are taxed in Canada:

• After June 25, 2024, any capital gains up to C$250,000 remain subject to the normal 50 per cent inclusion rate, however, gains above C$250,000 will be subject to a new 66.67 per cent inclusion rate for individuals.
• All capital gains generated through a corporation will be subject to a 66.67 per cent inclusion rate.
• The lifetime capital gains exemption for eligible property increases from $1,016,836 to $1,250,000.

Since many family-run grain farms are structured as corporations, family members can become shareholders in the corporation. During the sale of a farm, shareholders can each use their lifetime capital gains exemption upon the sale of their shares. While the combination of two lifetime capital gain exemptions would help reduce the taxes owing by each individual, ultimately the proposed changes will still result in a substantial increase in taxes, according to the GGC research.

In examples provided by the GGC, an 800-acre farm purchased in 1996 in Ontario would incur nearly C$1.2 million in additional taxes if sold today, while a 4,000-acre farm in Saskatchewan would face an increase of just over C$900,000.

“With over 40 per cent of farmers nearing retirement over the next decade, this tax increase introduces substantial uncertainty into their retirement planning,” said Andre Harpe, GGC Chair and Alberta grain farmer in the release. “Despite Budget 2024’s title of ‘Fairness for Every Generation,’ this change will actually burden the next generation of farmers, who are already grappling with costly transfers.”

With the higher taxes leading to increased costs for transferring a farm to the next generation, “this puts the family farm at risk, as the only ones that will be able to afford to pay millions of extra dollars will either be corporate farms or development companies,” said Larkin.

Already, Canada is experiencing a decline in family-owned farms, with a two per cent decrease between 2016 and 2021, according to the most recent data from Statistics Canada.

“To protect family farms, we are asking the government to exempt intergenerational transfers and allow them to be taxed at the original capital gains inclusion rate,” said Larkin. “This will ensure that farmers’ retirement plans remain secure and that the next generation can afford to take over, enabling family farms to continue being the backbone of Canada’s agriculture sector.”

With 40 per cent of Canadian farm operators set to retire over the next decade, “we need to ensure that the proposed personal income tax measures announced in Budget 2024 do not jeopardize the transfer of assets from one generation of farmer to another, but rather encourage the next generation of farmers to take up the calling, drive much needed rural economic activity and help the agriculture sector reach its growth potential,” said the Canadian Federation of Agriculture in a separate news release.

“By ramming these very significant tax changes through while farmers are in the field planting, we aren’t giving producers enough time to fully assess the implications for their families and their businesses,” said Keith Currie, CFA President.

*Update: A comment from the Canadian Federation of Agriculture was added.

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Steve Sanden and his son, Josh Sanden, are sitting at the end of the stage, near the stairs. They own and operate West of 3rd Ranch near Craik, Sask. They are at the Grain Expo to speak about their succession plan.

Steve took over the operation from his father alongside his brother. Now, Josh Sanden is slowly starting to return to their farm. With his brother considering returning as well, he wants to ensure they have a succession plan.

“I think as a young guy, I’ve made the decision that that’s kind of the path I want to go down,” Sanden says.

“It’s kind of daunting, you know, you look at land values and all that stuff and every decision is long-term now. We’re talking how we’re going to spread it out over… decades versus maybe just trying to make it work that year.”

Succession plan shortage

According to a report released by RBC in April 2023, 66 per cent of Canadian producers don’t have a succession plan. The report also says by 2033, 40 per cent of producers will retire.

That leads to doubt about what will happen to Canadian farmland in the future and who will fill the gap of retiring farm operators. It also underlines the importance of having a succession plan.

Elaine Froese is a farm family transition expert who coaches people on their succession plans — specifically, better communication and conflict resolution. She grew up on a cattle operation and is now part owner of Froese Family Farm.

When it comes to producers not having a succession plan, Froese gets straight to the point.

“Procrastination and conflict avoidance is killing agriculture,” Froese says. When she’s asked farm families in her audience why they’re not getting started on farm transition talks, “one of the first things they say is, ‘We’re too busy to plan.’ And another thing they will say is, ‘It’s too stressful because we don’t want to have conflict.’”

The emotional effect of succession planning makes producers put it off, as well.

“Many farmers don’t want to lose their identity as the main manager,” Froese says. “There’s a lot of emotion involved with change. And I think people are afraid of the emotional factors that affect their planning.”

She echoes RBC’s report about producers who are retiring, saying the main farm manager is often making transition plans too late in life.

“A lot of farmers don’t also pay attention to how old they are, because all of a sudden, they wake up and they’re not 21 anymore, they’re 70 years old… in your 60s, it’s about starting over or stepping back without stepping away.”

Trevor MacLean is an agricultural business advisor with MNP who works with producers on their succession plans.

He says producers likely don’t have a succession plan because they don’t know where to start. Succession planning is a huge undertaking that can be intimidating, he says.

“The family potentially may have issues that are prohibiting open, transparent communication on exactly where to start,” MacLean says.

Procrastination

When listening to the panel of producers at the Grain Expo talk about succession planning, it’s clear a formal succession plan was rare for previous generations.

Even now, many producers don’t think a formal succession plan is necessary, and an informal agreement is good enough.

However, MacLean emphasizes the importance of working on a formal succession plan. “I like to tell families that it’s never a good idea or outcome to manage from the grave.”

No matter what the farm includes — whether it’s a cattle ranch, grain farm, both or something else — there is an immense amount of wealth tied up in each family operation.

“You have to get ahead of it, and absolutely plan for it.”

Succession planning is a very complex and long process that is constantly changing. MacLean says sometimes people think it should be fair, but that can hinder the operation and the people involved.

“Often in farming operations, equal isn’t fair, because is the farm viable if you try to split it up two or three or four ways, and each try to be independent from the other? It typically doesn’t work that way,” MacLean says. “It’s great when Mom and Dad are around as the patriarch and matriarch of the family and can keep it together, but once they’re gone, splitting up a farm operation typically is not the best outcome for any legacy asset around agriculture.”

Advice

With so many farm operations without a succession plan, Froese and MacLean share advice on how producers can work on their succession plan.

Froese recommends producers figure out what they want before discussing the transition. “The first step before we even get to the table is to figure out what you personally want as the farmer. And secondly, what your spouse wants.

“Then, what is your future vision for the next chapter of your life? Because when I ask a farmer what he or she wants, sometimes they just say, ‘Oh, I never really thought about it.’ I say, ‘Well, we’re not really going anywhere,’ because you can’t move towards something unless it’s more exciting than what you’re leaving behind and letting go of.”

MacLean says producers need to sit down at the table and discuss what a succession plan looks like for their operation. This should include the generation currently operating the farm, the succeeding generation and any off-farm children.

He says a succession plan contains a multitude of different things, and all of those should be considered.

“You’re looking at the estate plan, you’re looking at the personal financial plan, you’re looking at a business plan, a continuity plan,” he says. “All of these plans come together through a sound transition process. So, yes, start the conversation, say, ‘Hey, where is everybody at with regards to this?’”

From there, timelines should be discussed and decided upon, as everyone in the family will be in different stages of their lives and have different opinions.

Then, he recommends working with professional organizations that deal with succession planning, such as MNP and Farm Credit Canada.

He says professionals can serve as mediators of sorts, as well.

“I often find that when I’m in the room, when I’m having the conversation with everybody one-on-one, that they’re more open to actually bringing up the topics that are potentially taboo, or in the past have raised the conflict in the family,” MacLean says. “But when it’s spoken to somebody like myself who is trained in family succession, there’s just that level of comfort.”

Next generation

Despite the data coming out of RBC’s report, Froese and Maclean believe there will be more succession plans put into place in the future. Froese says otherwise, family farm operations won’t be able to last.

Maclean, on the other hand, believes the younger generation is more interested in having formal succession plans than the generations before them, and will continue to push for that.

“They don’t want to sit back and have Dad be 80 years old, and still not have a stake in what they’ve been working in and on their whole life,” MacLean says.

“That generation now doesn’t want to wait for forever. They want to be able to look at themselves every morning with pride and say, ‘Hey, this is mine,’ or ‘This is ours,’ with their family, and know what they’re working for and on.”

While Josh Sanden knows his father never had a formal succession plan when he took over the farm, he wants to shape a formal succession for himself, and to ensure farming is a possibility for his children.

“I had a son here two years ago,” he says while on the panel, looking out at the crowd. “And I just want to be able to give him the chance to be able to farm… it’s going to certainly be a challenge for me to ensure that happens. And I think myself and my brother, we see that the challenges are going to be quite different. So whereas Dad said his was relatively informal 30 years ago, I know that’s something I’m going to slowly start on working with professionals.”

The post Most farms lack a succession plan appeared first on Canadian Cattlemen.

Today, most people believe that divorce implies that it’s a basic division of your home, bank accounts, cars and home furnishings.

However, on farms and ranches, our assets are usually tightly entwined with how we make our living. Moreover, realizing the value of crops and livestock takes time.

So, if you fear divorce for your family and your farm, how do you protect your legacy?

Since my last article covered the perspective of those marrying into already-existing family farms, it’s only fair that we cover the other side.

The statistics

As of 2021, according to Statistics Canada, there were 189,874 farms in Canada. With the average age of farm operators being 56 and the average age of divorcees being 46, it’s reasonable to assume that divorce will affect farm families.It’s fair to say that protecting farm legacies is paramount for today’s producers and farm operators.

Ninety-seven percent of Canada’s farms are family-owned and operated. Many of these are century-old and decreasing in number (189,000 farms in 2021 compared to 276,000 in 1996), making Canada the fifth-largest exporter of agricultural and agri-food products worldwide.

It’s safe to say a lot is riding on farmers’ shoulders.

So, what can be done to protect the legacy of Canadian farms when about 40 per cent of marriages end in divorce? And who are these farmers?

In 2021, 30.4 per cent of Canada’s farm operators were female. So, it would be wrong to assume that farms are always male-owned and that it’s the woman who is always marrying in.

Regardless of who has married into the farm, there’s a good chance that transition planning to protect the farm legacy is front and centre.

This is something Elaine Froese, speaker, author and certified coach dubbed Canada’s “Farm Family Whisperer,” knows all too well. In her book Building Your Farm Legacy: Tools to Empower Better Family Communication, she compiles valuable information for farmers on topics such as relationships, communication, teams and operations, planning, succession and healthy habits. Her true hope for couples? That they plant seeds of new ideas to embrace habits for better relationships and ultimately build the legacy of their farm.

As was mentioned in part one of this series, and because I think it bears repeating, Froese says, “pay attention to how tired the women are.” She often hears that women can be resentful for giving the best years of their life to the farm and ranch. She adds that people are often not feeling seen or heard. Based on what I’ve learned while interviewing farm women for my Farmwives books, I think that women prioritize quality of life and time off the farm more now than in previous decades.

Communicating goals

Something I’ve seen in my interviews with farmers for my books is that women and couples seem to be trying to be more intentional with their time and the way they do things than generations past. Froese says that women are not always willing to “cut off their left arm” for the sake of the farm. She has seen women manage 5,000-plus-acre farms as chief financial officer and administrator, with very little self-care (or appreciation).

Froese highlights that couples should create a values cloud, and an asset cloud. She also recommends they do a personal style indicator to know how they’re wired. She offers a personal style indicator and a values indicator to create clarity. It’s about what’s important to you and what’s important to your spouse or the person you will marry.

Make sure you make time in your marriage and family for what matters most. As Froese says, protect yourself from the “work-a-holic monster.”

Protect your farming assets

First, a reminder that property division is provincially regulated, and therefore it is impossible to provide legal information that would be universally applicable throughout Canada. You must seek individual legal advice, as none of the lawyers in this article are providing legal advice. Many couples are entering into domestic contracts that outline things such as compensation, trust claims, pensions, investments or spousal support releases that can help lawyers complete equalization calculations in the case of separation or divorce.

Catherine McCorquodale, lawyer with Monteith Ritsma Phillips Professional Corporation in Stratford, Ont., says that a domestic contract is the best way to protect yourself and your farming assets. This applies whether you’re marrying or cohabitating. You can draft a cohabitation agreement so that it becomes a marriage contract, without drafting a new agreement. These can be signed pre- or post-cohabitation/marriage, although there is some risk to doing it post-marriage if your spouse refuses to sign. The parties to the contract can deal with property — including real estate, farm assets, bank accounts, investments — and spousal support in the contract. But you cannot agree to post-separation parenting arrangements or child support.

A few important things to keep in mind for a domestic contract:

• Each party must make a financial disclosure, listing all assets and debts. If your agreement deals with spousal support, you also need to include incomes. The same lawyer cannot act for both parties. Each party must have the opportunity to obtain independent legal advice but cannot be forced to hire a lawyer.
• Each party must enter into the contract voluntarily with no duress or ultimatums.
• The contract does not have to be all or nothing. Not all domestic contracts are drafted so that the non-farming spouse receives nothing. There is flexibility and what the contract ensures is that the spouses have certainty of what is going to happen and who will need to pay in the event of a separation.

These contracts can be challenged for validity. That’s why it’s important to retain a lawyer. Spending a few thousand now to ensure the contract is drafted properly can save you tens of thousands later in legal fees.

Do not add a spouse to the title of property or business assets, or the farm corporation, without consulting a lawyer and accountant. Always consider what would happen in the event of separation — how much would the farm business have to pay? Again, for the sake of certainty in the event of a separation, document it, in a domestic contract or a shareholder’s agreement.

If there is a gift of shares, property, etc., again make sure it is documented properly with gift agreements. This is the same for loans. In the event of a separation, you need proof that the money was a loan, not a gift, and what the expectations were for repayment.

Make sure you have an up-to-date will that aligns with your domestic contract.

If the farmhouse crumbles

Divorce is never easy. But it’s even more challenging when it involves a farm.If this is where you find yourself, ensure you get the support you need. Again, communication and access to the right professionals can help the process.

Solidify your emotional support group and reach out for help when you need it.

The focus should be on a fair resolution that allows the farm to recover from the divorce, with succession planning for your children and future generations.

The best way to protect a family farm is to contemplate the effects of any future divorce.

– Billi J. Miller is a published author, photographer and speaker from east-central Alberta. She freelance writes from her home office where she can be reached through her website: billijmiller.com. For more on her Farmwives books, visit billijmiller.com/farmwivesbookproject.

The post When the farmhouse crumbles part two: Protecting the farm’s legacy from divorce appeared first on Canadian Cattlemen.

Usually this is good advice, not because family members are poor risks as business partners, but because of additional challenges involved in complex relationships. But family farms don’t have the option of following this advice. They need a good business arrangement and smart estate planning. The tough part is how to do it.

Graham Graff is a fourth-generation farmer in central Alberta. A few years ago he and Karin Naslund (a family friend) co-founded a consulting business — Legacy Family Business Advisors. Graff and Naslund also both manage family farm operations.

“I farm with my parents and older brother, and my brother and I are in a transitional period of taking over the farm from our parents over the next few years,” says Graff.

“He and I both went to business school but were interested in coming back to the farm — and working together as a family operation. I started Legacy Family Business Advisors with Karin, a friend of my parents. We were both interested in mediation and family business issues. We had our mediation designations and decided to work together to help farming families with conflict resolution and transition planning,” he says.

His interest in this field came from his farming background, business education (he holds an MBA from the University of Alberta), and training in mediation. Legacy Family Business Advisors focuses primarily on transition planning but also on conflict resolution for not only farming families but also family businesses of any kind. There is often a need for third-party intervention to help people get through various challenges.

Naslund, a chartered mediator, raises beef cattle and grows grain with her husband. She also has another consulting practice on the side. Being farmers themselves gives them insight and experience, enabling them to connect with other farmers and to know firsthand of some of the problems that they face.

“We’d both seen farms that had broken up due to conflict — family members no longer speaking to each other and unable to resolve their differences. Then the farm gets split up, or someone is no longer farming with their parents or siblings,” Graff says.

Start transition planning early

One of the biggest challenges is transition planning — passing the farm or ranch to the next generation.

“It’s usually a long and difficult process, and every situation is different. No farms are exactly the same in type of operation, number of farming children and non-farming children, etc.… Some of them may be working on-farm and some off-farm.”

Children who have invested their lives and labours in the farm often feel they are entitled to more of the inheritance because they have more sweat equity than the siblings who left the farm to do something else.

“How much that sweat equity is worth can vary from family to family. There’s a saying that fair is not always equal. Sweat equity does need to be rewarded/compensated, but how do you come up with that value? In my own farm situation, I have two younger siblings who are still in school but not going to be part of the management of the farm. There is a big piece in our transition plan regarding this situation,” says Graff.

Often it takes a mediator to help people get on the same page. This can be a good step for families, rather than not communicating and/or breaking up the relationship or suing someone, which results in traumatic, harmful and costly situations.

“Don’t delay planning; it’s never too early to start a transition plan. It can be tweaked along the way or added to, but you need to start. As my brother and I take over the farm operation here, we are already setting up things for when we might be passing it on to the next generation. Often people leave this discussion until too late; it’s important to start these conversations before there’s a traumatic event such as a death, or someone gets sick or injured,” he says.

“These things are much harder to deal with when you are in crisis mode. If you can plan for all of this beforehand, it can be much better, save the family from conflicts and turmoil, or prevent a lawsuit.”

Bridging generations

Generational differences are another big issue, says Graff. “When parents and children are working together it can often be a struggle to make that work. They often have different goals or thoughts on how things should be done.”

In some situations the older generation may be reluctant to let go, or to let the younger generation take over management decisions. Graff says they often see this situation. It takes time and patience for the older generation to share their experience, while the younger generation often has new ideas that might work well if the older generation gives them a chance.

“There’s a lot of give-and-take required.”

The work-life balance on a farm is also crucial, and can be an issue between the generations.

“The younger generation generally works hard but sees things differently than their parents did when they were growing up,” he says. The older generation may have struggled to succeed, often so focused on their work that they didn’t take time for anything else, and may expect the younger generation to do the same.

“I think the younger generation is often trying to find a work-life balance or do some work off the farm, like I am doing with my Legacy business — as a side business or a passion project. It’s tough to find time for it, but important to find a balance of on-farm and off-farm and this can be a point of conflict within families.”

Some families depend on outside income and this may mean that some of the farm work gets behind, doesn’t get done at optimum times or is neglected, and this can be a point of contention. It’s difficult to do everything that needs to be done.

Thus communication is important, taking time to discuss these things, or have family meetings to try to have everyone on the same page.

“Lack of communication is generally the biggest problem. There may be long-term differences and disputes that have never been settled, due to lack of communication on a daily basis,” says Graff.

Sometimes people assume that the other person knows what’s needed, but usually we can’t assume; we need to actually talk about things. There are often too many assumptions and misunderstandings when there’s lack of communication.

“There may be something someone did or said that is misunderstood, or one person assumes that the other person should know how to do something or that a certain thing needed to be done, and this can also be a source of conflict.”

There’s no substitute for actually talking and making sure you really are on the same page.

“Otherwise you might assume someone is angry or careless when actually they are just busy; they are not ignoring you or mad, but you don’t know unless you talk to them. Or they might be having a rough day in another part of their life or relationship,” says Graff.

Schedule meetings

“The farm is a busy place; it’s tough to make time to communicate. Scheduled meetings help. Our family has created a new process, with scheduled meetings. At the end of one meeting we schedule the next. When you meet may depend on the season, whether you are calving or busy harvesting.”

Graff says they try to have their main meetings, which take an hour or two to discuss everything and include an agenda, when they’re not as busy. They can schedule quick meetings at other times. It often pays to take a few minutes even during busy times, so everyone is on the same page and knows what each person is expected to do during those hectic times.

“Even 10 minutes in the morning before the day’s work begins can be helpful. On our farm, my brother and I work closely with our parents. We brainstorm in the morning about the best way to do what needs to be done, and throw out ideas that help us create the best plan of attack,” he says.

Knowing you will have a meeting can give each person the opportunity as well as the incentive to bring an idea to the table, or to mention something that’s on their mind. Otherwise some issues may sit and simmer. If people don’t communicate on a regular basis, relationships can deteriorate. Scheduling a meeting is an important first step, and almost as important as having it.

“If you know there will be a meeting, it gives you time to think about what you want to say. If it’s suddenly sprung on you, when you are focused on something else and needing to go prep the combine or grease the tractor or check the cows, you may react more adversely than if you’d had time to think about it. If you’re not prepared for discussion and not wanting to do it at that time, you are not in a good mood to have that meeting so it’s not going to go well,” he explains.

Be hard on the problem

There are ways to address and discuss things without destroying relationships or putting the family operation at risk.

“One thing I learned in my mediation training is that we should focus on, and be hard on, the problem at hand and not the people.”

Try to get to the root of the issue or problem before accusing the person. There is generally an underlying issue, he says, and you likely shouldn’t take out your anger on that person.

“On our farm we came up with a rule about this,” says Graff.

Every farm has equipment breakdowns, especially in busy seasons.

“We were quick to blame the person driving that piece of machinery, saying what they did wrong, when we really should have been looking at the problem. Was it a tough season and tough to swath or combine or hay?”

There can be circumstances beyond the control of the person driving the machine.

“Take time to envision yourself in that piece of machinery; what if you had this issue? We need to look for what the problem might have been with that piece of equipment before we blame the operator,” says Graff. Look at this as a learning lesson rather than condemning the person who experienced the problem.

Sometimes the younger generation learns best by trial and error. Even if they’ve been told something, they may learn it more readily if they experience what can go wrong and realize how they could have done it differently. Experience is often the best teacher; you may not fully understand what Dad or Grandpa told you until you come up against that situation yourself.

“It takes training — from the older generation to the younger family members,” he says. The older generation has accumulated a lot of valuable experience and wisdom, but patience is also important.

On the flip side, the younger generation sometimes understands more about new equipment and technologies, Graff says.

“Almost every piece of equipment today has a computer screen. The younger generation also needs to be patient when trying to teach the older members to learn new technology. It’s always a two-way street.”

There are graceful ways to handle differing views constructively.

“One thing that can be helpful is to take personality tests and share those with one another,” says Graff.

One option is the Myers-Briggs personality test, a self-report questionnaire indicating differing psychological preferences in how people perceive the world and make decisions. There’s also a quicker one called the True Colors personality test.

“If you know your family members’ personalities, this can help you deal with those differing views,” Graff says.

Another important tip in family relationships is to try not to let conflict fester. It’s best to get these things out in the open and resolved as soon as possible; otherwise they become a huge stumbling block.

“There is a time period, however, when people need to step back for a moment and think about it. If tempers flare, they need to walk away and take time to calm down and collect their thoughts. However, once they’ve processed the situation and had time to think about the real issue, they should deal with that conflict. Don’t let it sit there for too long under the surface because then it will boil over at some point and is usually worse later on,” says Graff.

“It may burst out at a very inappropriate time, like in a busy season when you are processing cattle or calving, or in the middle of seeding or harvest — trying to get things done before it rains. When something goes wrong or there’s a breakdown this is when we might see conflict boil over,” he says.

Sometimes it is beneficial to hire outside help to assist in resolving differences or creating an acceptable transition plan.

“Trusted advisors such as your family accountant or lawyer can help, but they don’t always have time to help with conflicts or start the transition plan. That’s where hiring a facilitator or someone within the CAFA (Canadian Association of Farm Advisors) organization can be beneficial — a neutral third party who can assist. There’s a wide variety of expertise and professionals in that organization, depending on what you are looking for. There are life insurance providers, mediators and people who focus on transition planning. This can be a great resource,” says Graff.

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When is the best time to start the process? Similar to planting trees, 25 years ago. But the second-best time is now, was a comment made by a recent Entreleadership Webinar, “The Essentials of Winning at Family Business,” facilitated by Alex Judd and John Felkins.

Actually beginning the conversation is not easy. But it has to happen before we involve accountants, lawyers and financial planners. Having a neutral third party to facilitate and lead the discussion can be extremely helpful.

This type of conversation is not something those of us in agriculture are used to having. It takes practice and guidance. As an industry we have become focused on and skilled at production. There is much less focus and skill on the “softer” or human side of things.

With proper planning, you can successfully grow a family-owned company without ruining all of your relationships, stated facilitators of the family business webinar. Another analogy to the family business transition is that of a relay race, with a smooth and seamless passing of the baton. That way when the successor is officially announced, the public’s response is, “Oh, I thought that had already happened.”

David C. Bentall, family enterprise instructor at the University of British Columbia’s Sauder School of Business, says there are three keys to success: a formalized strategic planning process, a board of directors with outside independent members, and regular family meetings.

Bentall and his colleague Wendy Sage-Hayward differentiate between continuity planning and succession planning. They also refer to six stages of transition that need to be addressed in the family business:

1. Preparing for challenges ahead.
2. Entering the business.
3. Learning to work together.
4. Dealing with newcomers.
5. Passing the baton to the next generation.
6. Taking the baton.

There are common transition patterns in leadership, be it a family business or not — cold turkey; delay, delay, delay; in, out, in; gradual/progressive; and interim/non-family CEO. The last two approaches are the most effective but do require a structured methodology.

Sitting down with the family

Coming together for a family meeting is a first step. Some operations are used to having regular meetings but many are not. The meeting can be organized by a family member or by a third party. One way to set up them up is following the Five Ws — who, what, when, where and why.

Who: When determining who should be involved, it is better to be more inclusive than less, involving both members of the family and the business. At this initial meeting it is not necessary to have the professionals you work with. They will certainly play an important role, but that is further down the road.

Why: It is important that everyone knows the purpose of the meeting. “We recognize the importance of putting together a succession plan for this operation and family and want to start working on it. This is not going to be a one-time event but an ongoing process. The more involvement we have, the more ideas and options we can come up with,” can be a helpful explanation.

Where: Choose a place that is accessible for all. Some also suggest that a neutral place is better, as opposed to someone’s home or the main office. If it is possible to combine the meeting with a family trip, that is great. Also, in today’s technological age, people can be included virtually through Skype or other platforms, if necessary.

When: Whenever the most people can get there. With young adults who are no longer at home or in the operation, some co-ordination and planning ahead will be required. Obviously picking a time of year that is quieter for the business is a good idea.

What: Let participants know what’s on the agenda. It also helps to let them know ahead of time what the discussion points will be. “As we work through this there are some things you can think about ahead of time to enhance the in-person discussions.”

These could include: Where would you like to see the operation in five to 10 years? Are there some barriers or roadblocks that we need to be mindful of? What are the important qualities/values of this operation? What do you most value about this family/operation? Just start with two or three simple questions to get the conversation started.

Adding another often used category is the How. Appoint a chair/leader and note-taker. Have an agenda and timeline. The expectations and goals should be clear to everyone. Share guidelines of how people are expected to participate and communicate.

Start with an opening go-round and check-in. Ask everyone to share their expectations for the time together. Another question could be: “What is the current state of the family business? Red, yellow or green.” Then have people share their reasoning.

A talking stick is a simple but very useful tool for meetings. Whoever has the stick is the one who talks. This is very helpful in both talkative, vocal families and quieter ones, as it ensures all are heard and no one person dominates.

At the end of the meeting determine the next meeting date and the action items that are to be followed up on, by who and when.

Other topics than can be included in initial meetings include an operation overview, determining the resources and assets that are involved in the succession process. A review of current professionals and others that will be required is another potential discussion point.

The contingency plan is an extremely important component. Start the “When I die” conversation: “If tomorrow one of the people at the table is gone, do we have the capacity to continue as seamlessly as possible?” It is highly likely that will be an emotional and difficult conversation but it’s much easier to have before a loss than when everyone is grieving.

Where are all the important documents? Wills, life insurance, loan agreements, passwords, land titles, lease agreement, professionals, banking and accounting information should all be gathered in one place, be it a book or computer file. And don’t forget about production and marketing plans and information. Is there a map of the operation with land locations, ownership and identifying names of fields or pastures? Another helpful tool is a large annual calendar of all the major events, business and personal, that is completed by everyone together. This can then be used as a management tool and broken down into seasons or quarters or whatever works best.

If you can get through these topics in the first meeting, you have done well. The most important piece is that you start doing it. Don’t expect perfection or total harmony. Adapt to what works best for your family. An outside facilitator can help the process. There may be other issues that come up that need to be dealt with first.

Don’t think this is just going to happen on its own, because it is not. It is not easy and takes courage. It is not going to be perfect, but you have to take action. It will have long-lasting effects on both the family and operation.

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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