Woodbury:Farm Family Business 08/06 06:27
Soft Assets Offer Invaluable Returns
Values, philosophies and relationships should be part of your succession
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
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
"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.
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
Copyright 2015 DTN/The Progressive Farmer. All rights reserved.
For more free DTN information sent right to your email each morning - click here
to sign up for DTN Snapshot.