One of the key issues we face in dealing with farm succession is helping people decide how they will distribute their assets amongst the next generation. Regardless of whether these are being allocated to family, or other benefactors, it is usually not a straight forward process and requires considerable thought and deliberation. Amongst the factors considered by the distributors are as follows:
What is fair?
How has the potential beneficiary contributed to the creation, maintenance, or growth of the asset?
What are the future aspirations of the potential beneficiary?
What are the requirements of the potential beneficiary?
It always surprises me how many parents feel they have not done enough to pass on to their children. Interestingly these feelings of inadequacy or guilt prevail regardless of the monetary value of the assets involved – whether it be thousands or tens of millions.
It is my belief that the greatest assets we can pass to the next generation are not tangible but intangible. We tend to focus heavily on our “stuff” (tangible assets) and not enough on our “stuffing” (intangible assets such as values, morals etc). As the saying goes “Give a man a fish, and you feed him for a day; teach a man to fish and you feed him for a lifetime”.
While our stuff may provide current wealth, it is our stuffing that lays the foundation for future success. Rather than waiting until we are nearly ready to depart this earth in deciding how we want to leave our stuff, we can decide much earlier how we want to pass on our stuffing.
If we gave this as much consideration as how we dealt with our stuff, we may ask questions such as:
What are our key values/qualities that we wish to pass on to the next generation?
What price are we prepared to pay (or stuff we are prepared to sacrifice) to show the importance of these values?
How do we know that we are succeeding?
Have we demonstrated that our stuffing is more important than our stuff?
After many years of helping families navigate succession, I have learnt that we are all vulnerable to letting things that matter least (our stuff) dominate that which matters most (our stuffing). If you intentionally pass on that which is most important to you, you never have to worry about feeling inadequate for the distribution of that which matters least.
Brendon Harrex.