Transferring Your Farm or Ranch to the Next Generation: Identifying What's Important

Marsha Goetting
MSU Extension Family Economics Specialist 

03/01/00 - BOZEMAN—This column is part of a series on estate planning and transferring property found in the MSU Extension newsletter, Beef: Questions & Answers.

Many Montana farm/ranch families wish to transfer land and business to the next generation—a very challenging process. Sometimes families avoid planning, because they do not want to deal with the conflict that arises because of differences among family members regarding goals, values and perceptions of fairness and equity.

Often, bringing up the topic is the hardest step. But once the idea of planning a transfer has been discussed, the next most important step is to identify what is important to each generation and each person.

Identifying what’s important

Goals are based on our values and beliefs—those things and ideas we hold in high regard. Many people become so involved with everyday business and family activities that they do not take time to think about what is truly important to them. Or, they may be so concerned with matters of a strictly financial nature that they neglect to consider personal and emotional issues.

A set of worksheets called "Identifying What’s Important" can help you pinpoint the importance that you and your family members place on various situations that may arise.

The older generation may face such questions as:

• What if you transfer a ranch to your children, and they choose to sell it instead of keep it?

• What if your children keep the ranch, but do not want to live or work there?

• What if you and your spouse disagree on how the property should be transferred?

• Will you need financial assistance from the property after it is transferred to your children?

The younger generation may face questions such as:

• What if you would like to ranch for awhile, but not for your whole life?

• What if some of your siblings receive assets with great dollar value than you do?

• What if you are no longer involved in day-to-day work or decision-making regarding the property?

• What if your parents want to remain involved in daily operation, even though you would rather take charge yourself?

Again, the key to a successful transfer is to address these issues ahead of time. The worksheets will help you to do that, by forcing you to rate each issue on a scale of 0 to 5, according to how important it is to you. It is crucial to first do the worksheets on your own, without consulting with others involved in the transfer process. Then, compare your answers with other family members and begin discussions about what has already occurred and what are the most important goals within the transfer process.

For more information...

The MSU Extension publication "Transferring Your Farm or Ranch to the Next Generation" (EB 149) includes a set of worksheets—one for the older generation and one for the younger. ) The book is available for $2 from MSU Extension Publications, PO Box 172040, MSU, Bozeman, 59717. "Talking to Aging Parents About Finances" (MT 9324 HR) is free on the Web at www.montana.edu/wwwpb/pubs/estate.html or for $1 shipping from MSU Extension Publications. For a free copy of the "Identifying What’s Important" worksheets, please contact Marsha Goetting at 994-5695, goetting @montana.edu, or PO Box 172800, MSU, Bozeman, 59717.

Send questions or comments to Goetting and Suzi Taylor, MSU Communications Services, Bozeman, MT 59717 or email them at taylor@montana.edu.

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