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Woodbury:Farm Family Business 05/06 06:46

   Invest in Your Legacy

   Your family's future is uncertain, but you can shape the backstory for 
generations to come.

By Lance Woodbury
DTN Farm Business Adviser

   We often consider management succession and estate planning in terms of the 
next few years. For example, who will take over the business for you or your 
parents? How does your estate plan position asset ownership with your children? 
These are important questions that provide certainty and a sense of continuity 
for the family and business in the relatively near-term.

   But if you start to think about your legacy, the conversation feels more 
permanent. What will you be remembered for decades after you are gone? What 
impact will you have on future generations, not just your children? Such 
questions go beyond the current business model and legal documents; they speak 
to your long-term influence on those closest to you.

   In their 2010 book, "Family Legacy and Leadership," Mark Daniell and Sara 
Hamilton observe that families who are able to preserve wealth contemplate an 
"unknown future" and make strategic investments in family culture that will 
benefit generations that haven't yet been born. Consider the following 
investments you might make as you envision your legacy.


   How many of your family know the backstory of how your business or asset 
base came to be? Helping people understand your history gives them an 
appreciation for the hard work and sacrifice that were made before you. Who 
contributed to making the family business what it is today? What were the 
crucial decisions or lessons learned? What hardships or losses did your family 
face? Knowing family history can foster a sense of stewardship and recognition 
that the assets or business are bigger than any one person in the operation. 


   If you've been successful -- however you define success -- it's due in part 
to how you do businesses. For example, the way you treat others, approach 
learning, make tough decisions, even how you handle leaner times, are all 
behaviors based on a set of core values. What you believe and how you act on 
those beliefs creates your unique approach to doing business. I know one 
operation where the value of being transparent in business dealings has led to 
significant new revenue opportunities because it elevated the trust of their 
landowners and business partners. To help future generations deal with an 
unknown future, take the time to identify and give voice to the values that 
guide your dealings with others.


   Some families believe keeping wealth together is worth some discord in the 
family, due to the tax and operational efficiencies, the ability to quickly 
take advantage of opportunities and the potential economies of scale. Other 
families believe conflict over management or ownership issues is potentially 
too dangerous or volatile both for the family and the business. They will tend 
to minimize the conflict, even to the extent of letting family members out of 
the business. Some families believe you should distribute minimal earnings, 
while others see no problems with bigger distributions that allow people to 
enjoy the fruits of current success. 

   What are your guideposts to help future family members make decisions 
together? What are your expectations for how people should handle the business, 
deal with wealth, or include in-laws? While there is no guarantee that future 
generations will follow your expectations, there is a good chance that 
thoughtful, mature and responsible family members will look to your directives 
as one set of lights that help illuminate their forward path.

   Among the most important assets you have to insure a positive future is your 
time; time to think, discuss and plan. The time you invest in telling your 
story will cultivate appreciation. The time you invest in articulating your 
values will guide behavior, and time spent expressing your expectations will 
help chart a course for the future. 

   Editor's Note: Lance Woodbury writes 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 experience 
specializing in agriculture and closely-held businesses. Email ideas for this 
column to Lance@agprogress.com


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