Having that difficult financial conversation for those on and off the farm

[Megan McCoy] Yeah, I think it's been such, I hate the word unprecedented, but I feel like every year I have been talking to people about this fear of what's coming next. When it comes to our finances. I think financial stress is a real thing. Families are facing that fear. The financial stress is about to hit is another really real thing.

[Yeager] Do you get the sense, though, that that was happening beforehand? 

[McCoy] I don't think that financial therapy, by field, really developed until 2008. And so I remember feeling that stress right after that crash, and people grieving the loss of their home or worried about losing their home. And then I feel like we had a period of peace or at least knowing what to expect. And then, since 2019, I don't think there has been such a steady fear of our financial safety since then. 

[McCoy] It really does make a unique situation. Then farm families may be more likely to experience financial stress. And I think also because farm families have such an emotional connection to their land, the finances, the job decisions all kind of get blurred between the financial decision and the emotional decision. So I think that financial health becomes even more key for our families. 

[Yeager] What does good planning look like in that scenario that you're laying out? 

[McCoy] Yeah, I think it becomes key to have someone, whether it's a professional to talk to or other farm families that you have met throughout your life, who can give you that support? Oh, say, do I have everything I can control in place? Do I have the right insurance? Do I have the right safeguards? Do I have the right savings in place? So if those external factors don't go my way, I'm not going to get lost on. 

[Yeager] In the family side of things when you're talking generational wealth or something like that, it doesn't necessarily have to be land, but how important is it that one generation reveals to another one? Or maybe it's not important that they reveal to the next one what they are wanting to have done with, with wealth in that transfer.

[McCoy] No, I think it's so key. So I only see a small handful of clients now because I do so much, research and teaching. But the last four cases I've worked with has been actually families fighting over an estate settlement. So the brothers and sisters fighting about like, what I'm getting and how it's distributed and what's fair and what's liquid and what's not liquid and all those conversations. And when we're grieving the loss of a loved one, anger is such a natural, empowering, like emotion that we naturally feel, so it can cause the conflict to get even more blown up. So the more we can have conversations when we are healthy and young about family succession planning and other dynamics about after we lose that person when we're happy and healthy, that it becomes easier to have those real hard conversations as we near the end. 

[Yeager] Is there a good time? You said healthy and you know, we're happy. But yeah, those at are those supposed to be at family gatherings at Thanksgiving or are they supposed to be in the middle of June? 

[McCoy] You know, I, I hope that it's not always around the holidays, but I think thinking about again, what do I want for you guys after I'm gone is a beautiful conversation that you can you don't have to focus on the death, but your wishes for your loved ones can be something that at Thanksgiving is actually kind of fitting to say, I'm so thankful for you, and I hope when I'm gone that you guys still have the bonds between you, that you don't experience, stress, that you can continue our legacy of this, you know, homestead or whatever your wishes are. 

[Yeager] Okay? And think about what you've just said. But I wanted to have you think about that transition side from someone who maybe doesn't want to have that conversation. The younger generation is wanting the older generation to lay out some framework, and you're getting resistance from those that have to those that might have someday. 

[McCoy] It is so difficult. And I think one of the first steps is for the matriarch or the patriarch of the family, the person, the older generation to come to terms with themselves, what they're giving, making sure that in their mind that they don't have anxiety about the distributions so that when they have this conversation, it is not, them processing out loud some of their anxieties. And so if you are lucky enough to be partnered with a wonderful wife or husband, having those conversations together before bringing in the younger generations can be a way to make sure that you process your own emotions before bringing it to the family. 

[Yeager] Do you get the sense that those tensions or pressures elevate at the higher dollar amount? When we're talking? Is that accurate? 

[McCoy] I think so, I think, I think when it becomes bigger numbers, I think that it becomes more emotionally laden. Like we were joking earlier about my kiddos being seven and ten. And so it's a lot easier for me to have a conversation about their $4 allowance than me saying, here's how much I make a year. You know, like, I think the bigger the number is, we project deeper into it. And it's fascinating. So there's some research that actually shows that the more finances you amass, the more scared you are of losing it. 

[Yeager] All right. Again, I'm going to go back to the commodity side of things because those are, you know, when you're talking millions of dollars in land or equipment and you've got people that will just take a family of four, one involved in the farm, three not involved. You've got voting power off the farm, not on the farm. Then, again, is that similar to any other dynamic that you've encountered in your career? 

[McCoy] Oh, yeah. So let's take it even further, too. You have one child who's going to take over the farm that on paper is worth so much money, and the other 3rd May be getting some kind of asset like cash or the house or some, I don't know, some kind of distribution. On paper, those numbers will look so different to those children. But the running of the farm is expensive. So even on paper you're getting a farm valued at $500,000 and the other person is only getting $10,000 in cash. They're like, that's so unfair. Not thinking about all the contributing factors of keeping the farm in motion, you know? And so I think that's where conflict can happen between sibling pairs of when you have a gift, a illiquid asset like a farm. The comparison is not apples to apples. And without conversations behind those decisions, assumptions can be made about jealousy or favoritism or a host of other factors.

[Yeager] Well, yeah, because you can be sitting in those rooms and you've probably sat in those rooms where someone says, I'm only getting ten grand and you're getting this. Yes.

[McCoy] And then the conversation about how do you split a farm fairly, or one person who wants to sell it becomes so much more conflictual, especially during the grieving process. So if those conversations had occurred earlier on, here is my reasoning behind these decisions. Here's why I'm getting this person this because I love you guys all. It is so much easier to navigate than after you're gone. And again, that mind reading that happens. That's because mom loved you more, or mom loved me less. You know? 

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