There are two big pieces to the estate planning puzzle: who will run what (management succession) and who will own what (the transfer of assets). In my last ProfitTips column I called management succession the more difficult of the two because it involves judging the competency of people you love and holding them accountable to produce results. It is perceived by the incoming generation as an issue of respect. But the transfer of assets is no cake walk either.
Most people assume that the biggest estate planning fights involve “Who will own what?” It’s been my experience that “Who will run what?” is often a bigger issue. “Who will own what?” is usually a question of perceived fairness. To heirs, “Who will run what?” is a question of respect.
If you have a family ranch, whether you know it or not, you have a family employment policy. At least your kids think you do. In the absence of a formal, written policy, kids often grow up with the expectation that regardless of their education, experience or talent, there will be a role for them in the family business.
University of Wyoming Extension agent and Ranching For Profit School instructor, Dallas Mount, recently led a management succession workshop in Baggs, Wyoming. Dallas is a gifted, innovative teacher, and I was flattered when he asked me to participate in the program.
Dallas did a great job of distilling successful succession into five core areas:
What criteria does Santa use to determine who’s naughty and who’s nice? There aren’t many people who are completely naughty and even the nicest people slip up now and then. It all seems pretty subjective to me. I’ve got a few ideas for Mr. Claus, a long-time ProfitTips reader, that would make these decisions easier, increase his confidence that he’d made the right call and alleviate the stress for everyone concerned. It would also be useful if one of the kids on his naughty list took legal action.
This is an exciting time of year for me. Thanksgiving is awesome, and I have a lot to be thankful for. But that’s not the excitement I’m feeling right now. The excitement comes right after calves are weaned and cows preg-checked. Why is that so exciting? (I’m glad you asked.)