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Woodbury:Farm Family Business 08/06 06:27

   Soft Assets Offer Invaluable Returns

   Values, philosophies and relationships should be part of your succession 
plan. 

By Lance Woodbury
DTN Farm Business Adviser

   While succession and estate planning deal with the passing of financial 
assets and the transition of management, there are other, perhaps less 
tangible, but equally significant "soft assets" to transfer. 

   Soft assets are defined as values and philosophies you've inherited from 
your parents or grandparents, or the memories of past events that were 
important for your family. They also include the relationships you have with 
your siblings or cousins that now foster bonds between younger generations of 
family members. These soft assets create a broader appreciation for the family 
and are part of the glue that keeps members together over time.

   How do you exercise care in passing on these soft assets? Consider the 
following three vehicles alongside your current estate and succession planning 
efforts. 

   SHARING FAMILY EXPERIENCES 

   One family I know takes an international vacation every few years. Another 
family occasionally participates in a short-term mission trip. Yet a different 
family takes an annual vacation to a previously unvisited part of the country, 
and still another works in an inner-city soup kitchen as part of their holiday 
gathering. 

   "Getting away" is only part of the reason for their planned excursions; 
their broader goal is to experience or learn something as a group, while 
enhancing interpersonal relationships. Those new experiences help put everyone 
on the same level and provide a chance to come together, away from the politics 
of business leadership or thorny inheritance discussions.

   SHARING GENEROSITY

   No matter how successful the business, the likelihood that everyone will 
return to work in the business is slight. In the past, working in the family 
business provided a way to transfer values to the next generation. One's work 
ethic, honesty, integrity, respect for others and discipline were readily 
observed in shared labor.

   In order to provide a similar vehicle, many families focus on charitable 
giving, which can include those family members who didn't return to the 
business. As they learn more about the non-profit environment, they soon 
discover that faithful philanthropy demands a lot of work and requires 
interaction with one another and the charities they support. Philanthropy, 
then, becomes a way for all of the family to interact, while offering a new 
forum to observe and apply the values that have shaped the family business.

   SHARING FAMILY HISTORY

   My grandfather left us a book of memoirs that included stories from his 
youth, some of the major events on our farm and ranch and nuggets of wisdom 
passed down from his parents and grandparents. Several other families I know 
have published books, or they spend time as a group recounting the major events 
in their history, in an effort to provide younger or future family members a 
sense of family identity.

   Whether family members succeed or fail, regardless of who they marry or what 
career they pursue, they never lose their roots. Teach them the history of your 
family. Talk about the Depression or Dust Bowl or floods, blizzards and 
drought. Write about the transitions and positive and negative experiences in 
your family. I know several families that have even commissioned murals to 
visually depict their history. Like shared experiences and philanthropic work, 
a common historical understanding provides another opportunity to develop the 
ties that bind.

   It's both natural and easy to become focused on money and control in estate 
and succession planning. But the values, philosophies, relationships, 
experiences, memories and feelings of family add so much more to the character 
of family members and the conversations about the future. Your investment in 
such soft assets will be well rewarded. 

   EDITOR'S NOTE: Lance Woodbury writes family business columns for both DTN 
and our sister publication, "The Progressive Farmer." He is a Garden City, 
Kansas, author, consultant and professional mediator with more than 20 years of 
experience specializing in agriculture and closely-held businesses. Subscribers 
can access all of his archived columns under News search. Email ideas for this 
column to Lance@agprogress.com

   


(MZT/CZ)

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