Second in a series

The role of a father and who is considered to be "family" are two critical aspects that greatly influence the long-term success of a family farm operation.

Dr. Ron Hanson, distinguished professor of agriculture at the University of Nebraska-Lincoln, discussed these two issues during the 57th annual National Hard Spring Wheat Show Tuesday in Williston.

Hanson was the event's featured speaker at the Airport International Inn as he addressed ownership succession and the transition of management control for farm families.

Hanson said a father in a family farm operation often wears two hats -- that of boss and that of a father. He had a father approach him one evening who told Hanson, "the toughest day of my life is the day I fired my son. I can shut my eyes right now and still see that farmer's face and the tears running down his cheek. I never forgot that night." When wearing the boss hat in the family, dad is in charge, he said. When wearing the dad hat, father understands and takes time to listen.

"Dad may have to change hats several times during the day. What hat to do you wear and when do you wear it? That is a challenge," Hanson said. "Adult children must make this distinction between the two roles."

He said a dad needs to correct mistakes that build confidence and trust in the adult children working the farm.

"They are your children, but they also are adults, they are responsible people," Hanson said.

He said these adult children want to be appreciated and know their sacrifices and commitment count.

"Tell those kids job well done, we're proud of you. Those kids will work all the harder to do it again," Hanson said.

A returning adult child has to be treated as an adult, he said.

"If dad only wears the boss hat, pretty soon these children find out they are just hired help," Hanson said. "That quickly damages the relationship in the family. Pretty soon these children have very little motivation to work hard and be successful."

These children also may quickly leave the farm to escape the boss hat that dad always wears, he added.

But what if dad dies and mom takes over?

What if there were some things mom always thought should be done and dad wouldn't allow it?

What would the mother do next?

Hanson shared the story of a wife who wanted to deal with an orchard on the farm that had grown full of weeds and also was the disdain of neighbors, but her husband wouldn't allow her to. The moment the wife got a phone call that her husband had died at the nursing home, she placed two phone calls, Hanson said. The first was to a contractor to get rid of the trees. The second was to the mortuary.

"They hadn't had visitation for the father yet and the trees were already gone," Hanson said.

The key to answering the question of what is mom going to do after dad dies is how involved was she in the farming operation, he said.

"Did mom always feel it was his farm, never her farm? A lot changes and changes very quickly," Hanson said.

He also poses the question of what if children don't return home and mom is left alone on the farm? An even more dynamic question is what happens if mom remarries?

"What if stepdad takes over control? What is mom only starts to listen to the stepdad?" Hanson asked.

It's important for parents to discuss such matters as what happens if one of them dies and what are their respective wishes, he said.

"Has anything been put in writing yet, or is it just assumed everything will eventually be taken care of in the exact manner the deceased parent wanted?" Hanson asked.

If mom was the one who owned the farm to begin with and mom wore the boss hat, Hanson doesn't think much changes in the farm operations when dad dies first. He also doesn't believe much changes if dad continues to farm if mom wore the boss hat and mom dies first.

Meanwhile, who is viewed as "family" is just as important when considering the dynamics of running a family business, he said. He said daughter-in-laws prompt the most discussion in this regard.

"If I had a dollar for every time I heard the words daughter-in-law, I could retire with money to spare," Hanson said.

These days, the biggest fear is the parents' son and the daughter-in-law may divorce.

"So let's just keep her out to start with. The less she knows the better," he said is often an approach that farm parents take.

Is it only blood relatives who are considered family and are in-laws even treated or considered as family and involved in the operation?

"Many families adopt the strategy the less the in-laws know about the business, the better we are off for it," Hanson said. "The thing I want to share with you is that strategy will backfire in your face every time. That strategy will come back to haunt you. That is a personal guarantee."

Relationships of trust fail when a person finds out that decisions being made by others impacts their well being and future happiness, but they are not allowed to be part of that decision, he said.

"The whole point is you have now created suspicions. Once you create suspicions in a relationship, you no longer have trust," Hanson said. "Once you destroy trust, you no longer have respect. How can you respect a person you couldn't trust?"

What happens if a farming son is killed in a farming accident and the parents find themselves in a farm business partnership with their daughter-in-law?

"Would that daughter-in-law be part of the family now without that son? What would those parents do?" Hanson asked. "If you're a parent who gets caught in this situation, you have to be very careful. Think it through."

The only legacy to that dead son is his children, Hanson said.

"If that daughter-in-law leaves in a tiff, would those grandparents see those grandchildren again?" he asked.

To help deal with in-laws, Hanson is now a firm believer in prenuptial marriage agreements.

"It's just good business management," he said, while admitting there are two points of view on the matter.

The first point is from the view of the in-law, who wants to know why she/he should have to sign such a document in the first place, especially if that person helps work the operation.

To address this point, Hanson said to ask the in-law to think of what the family has done to build the business.

"The only way this farm will ever be successful is if this farm stays as a unit. If this farm is divided, sold, split off, no one wins," Hanson said.

If a prenuptial agreement is done fairly, no one ever gets upset. In talking about the reasons behind the prenuptial agreement and its overall purpose, the new family member should understand and feel he/she has been treated fairly, he said.

Hanson is also a firm believer in prenuptial agreements for anyone entering a second marriage.

"If you think children have trouble settling an estate, wait until you have stepchildren," he said.