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Home  »  Ag Sectors

Planning can keep ranch in family

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By DOUG WARNOCK


For the Capital Press


Thoughtful planning can keep the ranch in the family and avoid unsettling consequences that often result from the death of the parents.


Ron Hanson, professor of agricultural economics at the University of Nebraska, discussed succession planning at the Society for Range Management's 65th national conference in Spokane recently. What happens to the ranch when Dad and Mom are gone?


"Many families, knowing the importance of planning for the transfer of ranch ownership, still refuse to face this issue," Hanson said. This is a very emotional issue and too many ranch families avoid it.


"One of the greatest challenges now facing agriculture is who will end up owning the family farm or ranch," Hanson said.


When Mom and Dad avoid developing a plan to transfer ownership and control of the ranch, they do their family a terrible disservice.


"A succession plan cannot only save the ranch but also save the family," he said. He cited a situation in which the absence of a succession plan resulted in the five adult children of deceased parents ending up in court with seven lawyers representing them. The ranch was idle for three years due to the legal proceedings and the bank finally foreclosed. The land was eventually auctioned off and the five heirs were left with nothing but attorneys' fees. The family was split apart.


While succession of ownership is difficult to talk about, it must be addressed and the parents should take the initiative. Parents have the right to make the final decision, but they should allow all their children to express their opinions about the future management and control of the family ranch. It is important that all the children know what the plan for succession is, so that they can adjust their personal plans accordingly.


Usually one parent will survive the other. What happens if the surviving parent remarries? Who gets control of the ranch then? These are tough things to consider, but they need to be addressed. Sons-in-law and daughters-in-law can either be treated as family members or as outsiders. Which is best for your ranch and family?


Hanson urged that all children be treated equitably, not necessarily equally. If any of the children helped operate the ranch while others didn't, there should be recognition of this in the succession plan. However, all children should share in a fashion that is fair to all. Parents must have a clear vision for the ranch and their children need to understand and respect that vision and plan.


Hanson listed the following helpful tips:


* Start talking now.


* Put things in writing.


* Keep everyone informed.


* Expect the unexpected.


* Time seldom solves the problem.


He urged parents, when bringing a son or daughter into the family ranch operation, to find a way to help them build equity and grow assets.


"Parents don't owe their children anything, but parents who provide for their children give a real blessing," he said.


Remember, ranches can be replaced, families cannot.


Doug Warnock, retired from Washington State University Extension, now lives on a ranch in the Touchet River Valley where he consults and writes on ranch management.



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