Successfully transitioning land from one generation to another can be a huge challenge. How can family farms and ranches be kept productive and sustainable while the interests of both senior and succeeding generations are fully served? AVLT’s November 22nd Farm and Ranch Succession Planning Workshop addressed these difficult questions.
Roughly three quarters of the farms and ranches in the US will change hands over the next decade. Such change affects our food system, as it opens the possibilities of land division and development, both of which can result in removing significant amounts of land from agriculture.
The AVLT workshop brought these issues home to 75 participants, including a multi-generational group of 47 farmers and ranchers. The workshop delved into the basics of succession planning–how to structure a farm or ranch business to keep it in the family, what to include in a will/estate plan and how to avoid unnecessary taxes. The dynamics of family communication, including how to run a family meeting, were also explored.
The senior generation voiced concerns about:
- When to retire and how to finance it;
- Keeping their legacy going;
- Fears about the changes the new generation would want to institute;
- Being fair to all of their heirs, including those having no interest in the farm/ranch;
- Teaching their heirs farming/ranching skills;
- Providing for their farms or ranches when they had no direct heirs;
- Protecting the sustainability of their land; and
- Learning to gracefully relinquish the role of decision maker.
The successor generation expressed concerns about:
- Carrying out the wishes of their parents;
- Respecting their parents’ lifetimes of hard work, while questioning whether such a lifestyle was for them.
- Deciding whether the farm/ranch business is viable;
- The difficulties of reaching consensus with the family members running the business; and
- Determining whether they actually want to live on the farm/ranch.
The workshop featured presentations by professionals designed to address the questions of both generations and to initiate the process of the transition. Each speaker outlined, within his or her area of expertise, what a successful transition might involve and what options participants might consider for achieving important goals, such as not having to sell or divide the land because heirs cannot agree or do not have the skills to make the business work. Each speaker emphasized that it is never too early to start planning. The presenters who kept this active audience in their chairs all day shared pivotal information in a clear format: Reggie Knox, Executive Director of CA FarmLink spoke on “What is Succession Planning and Why Do It?”; Olivia Boyce-Abel of Family Lands Consulting offered “Meet Your Peers” and “Successful Communication at Family Meetings”; Rod Carter of Northern California Farm Credit Business Consulting presented “Transferring the Business”; Steven Johnson of Mannon, King and Johnson offered “Estate Planning Nuts and Bolts”; and Michael Delbar from California Rangeland Trust outlined “How a Conservation Easement Could Fit the Estate Plan”.
During lunch, Mac Magruder and his daughter Grace shared the gauntlet their family had to run in holding on to their ranch. Mac Magruder is the fourth generation to shape his family’s property in Potter Valley. His grandparents raised sheep and his father farmed pears and cattle. Mac grew up helping on the ranch, went away to college and graduate school, and returned to Potter Valley in 1976 to take over management of the ranch. Grace now takes part in the successful ranch business and has added new facets.
The Farm and Ranch Succession workshop was the third in a five-part series, A Legacy of Working Lands—Preserving Anderson Valley’s Heritage. A low-cost clinic for participants from the 11/22/13 workshop featuring individual sessions with professionals will be held early in 2014. Part two of the Ties to the Land Workshop given by UC Extension with Greg Giusti on timberland succession will be held on January 30th. This session will focus on estate planning for timberland owners. If you did not attend part one of the Ties to the Land workshop and would like to register for part two, please call Shelly at 895-3150.
We would like to thank the Community Foundation of Mendocino County for granting us a Community Enrichment Grant to host these workshops at nominal cost to the participants. Additional sponsorship assistance came from the East Bay Community Foundation, Savings Bank of Mendocino, California Rangeland Trust, Mendocino Land Trust, Navarro River Resource Center, Anderson Valley Solar Grange, The Toll House, and the Boonville General Store.
The Farm and Ranch Succession Planning Workshop is built on a model developed by California FarmLink with the Center for Land-Based Learning. Special thanks and appreciation goes to Kendra Johnson, a board member and consultant to California FarmLink, who coached AVLT and Mendocino Land Trust board members, local professionals, and natural resource agency personnel to host the workshop and to Ariana Reguzzoni, California FarmLink’s Northern California Coordinator.