Early warning signs: Don’t ignore red flags in farm succession

WHAT IS A ‘RED FLAG’ IN FARM SUCCESSION, AND WHAT DOES IT MEAN?

When farm families think about succession planning, the focus often falls on wills, farm ownership, tax strategies, and asset transfers. Those are critical, of course, but before most of that can happen, an actual plan must be made.

A red flag, or a warning sign, could be an early indicator that something isn’t quite right, or even a subtle sign that a farm transition may be at risk. And if not addressed, that issue could grow into conflict, confusion, or financial problems during the transition.

WHAT ARE RED FLAGS TO LOOK FOR ON THE FARM?

The three most important red flags to watch for in farm succession are:

• Families not talking
• No succession plan at all
• Procrastinating

Silence is one of the most common warning signs and can come in many forms. Sometimes it can be one person or a group of people who keep quiet. Maybe they don’t feel valued, or their opinions have been shut down too often for them to continue speaking up. Silence can take the form of avoiding certain topics too, like succession in general, finances, or roles and responsibilities.

Avoiding conversation can also stem from discomfort, fear of conflict, or a belief that “things will just work themselves out.” But silence leaves too much to assumption, and every voice counts during a farm transition. Not only that, but every voice should be valued and needs to be heard. Families need to treat each other with respect and listen to each other.

Having no plan at all or operating without a formal farm succession strategy isn’t just a red flag, it’s a recipe for disaster. Unfortunately, it is also common. Many Canadian farms don’t have a formal farm transition plan, and without it, they are risking everything.

Farmers need a well-documented plan that includes a will, estate plan, legal agreements, tax strategy, job descriptions, and compensation. Without a farm succession plan, farmers aren’t just putting their land at stake, but also the legacy and continuity of their business.

Procrastination, or putting off the hard work, is more than just “being busy.” It’s a clear red flag. Procrastinating is also one of the biggest barriers to effective succession, because a proper plan takes time and careful consideration. Putting off a plan can be a form of avoidance. In many families, this can stem from unresolved conflict, continuous blow-ups, or misaligned expectations.

Procrastinating also means no action. The longer farm families wait to have meaningful conversations and start planning, the greater the risk that something unexpected, like an illness, accident or farm emergency, will force a transition without a plan.

WHAT CAN FARM FAMILIES DO IF THEY IDENTIFY RED FLAGS?

Red flags shouldn’t be ignored. Use them as warning signs that something, or someone, isn’t okay with the current situation. If red flags arise, go back to the foundational tools of farm transition: open communication, conflict resolution, transparency, and finding alignment with values and belief systems.

Bringing in a third-party farm succession or transition expert who can help navigate everyone through challenging discussions and decisions is also very helpful. Red flags can be turned into opportunities, so don’t be afraid to embrace them. •