Family + Change = Succession Planning Basics
For the ten years I have been involved in BC agriculture I have watched a generation of owners and parents run successful operations. Now that they are considering retirement, forced or by choice, and the next generation is looking to secure equity, to own something, change is imperative. Succession planning defines what your future “could look like” and helps you get there. In essence, you are defining significant changes to your family structure, roles, dynamics, and relationships.
Unfortunately, succession and estate planning often boil down to conflict over money, power and assets. It can be made more complicated because individuals may not engage at the same pace for a variety of reasons including being afraid of change or the very real belief that if we talk about something bad, it will happen.
The succession planning process, while intense, can involve coaching family members and significant others to a harmonious “new normal”. It is preferable to maximize the benefits and minimize the negative effects. Here are the four underlying steps of succession planning:
Acknowledge What is Changing
KEY: Define the “new normal”, the goals, options, and benefits
Say them out loud and write them down.
What are the results? Benefits, risks, and consequences? What is left behind? Is it “an old way of doing things” that doesn’t work anymore?
How do you feel? Angry, relieved, ashamed, excited, depressed, afraid, anxious, sad, etc. This is very personal and unpredictable. The changes may be big to you and not to others.
Focus on your specific needs and situation rather than others’ reactions.
KEY: Make choices.
You may have an open mind and be excited—or resist, complain, avoid, ignore, undermine, and sabotage.
Change is both positive and negative. Gather information and listen to the rationale, then look for “both sides of the coin” for yourself and others involved.
Name the losses and grieve them.
Remember that what seems “wrong” now may be the “right thing” in the future.
Adjust to Change
KEY: Maximize the advantages and opportunities then minimize and compensate for the negative aspects of the change and the new situation.
What needs to be abandoned or tweaked?
Plan for yourself. What do you need? How can you be involved?
KEY: Put your “eyes on the horizon”. Research trends. Talk. Prepare.
Evaluate the results of the changes and modify.
Recognize the decisions you make today may change and evolve over time.
The work we do to transition operations to the next set of hands is critical to a wide variety of issues including food security, good health, and our economy. You may find it difficult to start the conversation; however, I encourage you to take the first steps. You can talk, plan, innovate, and modify—then relax as the plans roll out. It is reasonable to enlist a third party, such as counselor, lawyer, or financial planner to manage the conversations. It is worth the effort and time to get things right.
Karen Fenske is a financial consultant with Investors Group and is licensed to sell Mutual Funds and Insurance in BC. She has a degree in business and mediation skills, and has provided strategic planning and business development for 25 years. She lives in Vernon with her husband. She enjoys spending time with her two young adult children, in her garden, hiking, skiing, travelling around the province, and watching murder mysteries.