Kathryn Williams is an estate planning and elder law attorney with Scarpetti & Scroggins in New Hampshire. For the last 20 years, Kathryn has assisted families through intergenerational transition plans. Many of the transition plans Kathryn has created are for farm families. Kathryn notes that although farming itself is unique, many of the issues involved in transitioning wealth are the same for farming and non-farming businesses. One unique aspect of farm transitions, however, is the challenge of creating succession plans when the farmland itself is the client’s most valuable asset. This is a challenge because it is often difficult to discern how valuable the farmland is, for a number of reasons: 1) many farmers are unwilling or unable to pay for expensive appraisals of the land, 2) the appraised value of land can vary from appraiser to appraiser, and 3) even when an appraisal is done, appraisers may not base their assessment on the agricultural value of the land. Instead, appraisers often base their land value assessments on what is deemed to be the “highest and best use” of the land, which might involve putting the land into development instead of preserving it for farming.

Kathryn cautions that attorneys assisting families with a farm succession plan should always make sure that the land is surveyed, especially with parcels that have been passed down through many generations. Often, there may be informal easements or other familial arrangements that should be recorded and could impact the land’s value.

Kathryn tells attorneys working in this area: “A plan is everything—not planning is likely to end up with a disaster.” She says the most common scenario involves farming parents who decide to leave everything to their children in a will and let the children sort it out, which, Kathryn says, “is not a good idea.” To convince her clients to create a succession plan, Kathryn sits down with them to talk about their goals and the details involved. For example, she says to her clients, “Bring me through what you envision 20 years from now. Who is working on the farm? Where are you working or living? Who are the players managing and working the farm? Do you want to retire? If so, when? How much money do you need from the farm in order to do so?”

Kathryn also notes that working in this area is not as simple as an attorney drafting a plan, handing it to the clients, and watching the clients walk out with everything resolved. Often, an attorney will be involved in family meetings between the parents and the children and may need to act in a mediator or negotiator role. Kathryn always advises the families she works with that she cannot represent the interests of the parents and also the interests of the children, due to conflict of interest rules. Even though she represents the parents in these scenarios, she says soliciting input from children is critically important to drafting the succession plan—both from children who might want to take over the farm and from children who do not want to farm at all. Determining what the clients want and helping them talk through the related issues is key. Only then, Kathryn says, can an attorney can become a joint problem solver in preparing a legal resolution for the succession of the farm and the business.