Finding Fairness in Farm Succession

Thursday, February 19, 2026

Balancing expectations across multiple children

By Mary Loggan

Succession planning is one of the biggest challenges for many family farms across the Prairies.

It involves balancing the complex dynamics of family relationships with the financial realities of managing a farm business.

When multiple children are involved, each with different roles or interests in the farming operation, the process becomes even more complex. Producer expectations, perceptions of fairness, and economic viability all have to align to ensure the farm’s long-term success and family harmony.

Better Farming recently connected with Valerie Panko, a business advisor at FCC, to explore how farmers can navigate these complexities by planning thoughtfully, communicating openly, and creating equity-based structures to fairly divide assets and responsibilities among multiple children, both on and off the farm.

Dividing assets among farm children

According to Panko, who is based in Regina, the farm's viability is the bedrock of any succession decision.

“When multiple children want to take over, you have to be concerned about whether there’s enough farm and assets to go around to keep the operation functional.

“It’s about more than equal portions – it’s about financial and operational viability.”

She says families should do their homework. “Calculate costs, profit margins, and what sacrifices each child is willing to make to ensure the numbers add up. Without this clarity, plans risk collapsing under unrealistic expectations.”

Joint ownership or leasing arrangements can offer pathways for multiple heirs, but Panko stresses the importance of safeguarding financial independence and farm functionality.

“Current multi-sibling farms may share ownership, but ensuring each party’s financial independence is crucial.”

Financing and profitability considerations must guide decisions on how assets, such as land and equipment, are split or shared. Only then can a fair and sustainable division be mapped out, she says.

Farming or non-farming children?

One of the most challenging aspects of succession planning arises when only some children work full-time on the farm while others do not.

Valerie says that fairness isn’t about equal cash or land splits but recognizing different forms of contribution and need.

“There’s no fixed definition of fairness. It’s up to the family to decide what fairness means in light of differing roles.

“The idea of ‘sweat equity’ encapsulates the unquantified value farm children bring beyond their wages.

“If a cow escapes at midnight and someone puts in the effort to bring it home, that’s sweat equity that isn’t counted on pay stubs.”

Contributions like innovation and management add further layers, underscoring why labour inputs must be evaluated fairly alongside financial inputs, Panko notes.

Families also need to consider that not all children contribute in the same way.

“One child may be working full-time on the farm, another working part-time or off-farm, but still contributing financially or in management support. These contributions, including time, money, and ideas, should be tracked transparently over time.”

To achieve balance, Panko recommends governance structures that clearly define decision-making, conflict resolution, communication, and compensation processes unique to each family’s situation.

“Governance helps avoid relationship breakdowns by designing rules about how contributions are valued, recorded, and converted into ownership or compensation.”

Recognizing diverse contributions

Running a family farm requires a blend of time, money, labour, and management, Panko explains.

“Family partners contribute differently – some full-time, some part-time or financially. For example, an on-farm sibling may reap lifestyle benefits, while an off-farm sibling might have more disposable income.

“Finding balance means having proactive conversations where all contributions, financial, labour, and management, are valued. Without agreement, resentment can build.

A practical approach involves tracking gains and contributions over time. Families should set expectations for future gains and financial possibilities, including retirement cash flow and asset acquisition.

Panko advises, “Know how many full- and part-time employees the operation can support, and if part-time contributors can convert their sweat equity into future ownership.”

“For instance, a full-time junior family member may earn $55,000 in salary but be owed $65,000 in sweat equity, which must be tracked and converted into ownership stakes later. Likewise, a part-time or off-farm sibling who contributes money but not cash can earn equity credit with full transparency.”

Challenges

Introducing multiple heirs brings inevitable challenges, Panko warns.

“The more people who are involved in the operation, the greater the chance of conflict arising.

“If you don’t have an eye for potential conflict and a plan to manage it, you might find yourself in difficult situations.”

Governance is one of the most effective ways to maintain fairness and family cohesion. Panko describes it as “designing your own set of rules for how contributions are valued, recorded, tracked, and compensated.”

Governance includes four pillars: Decision-making, communication, conflict resolution, and compensation.

“Families can customize these to suit their unique situations. With agreed-upon frameworks, family members know their roles, rights, and processes for dispute resolution.

“Without governance, ‘fair’ has no fixed meaning. You create fairness through shared agreements.”

Facilitators can help families shape these processes, ensuring every voice is heard and that expectations are transparent.

Planning for smooth transitions

Succession planning is not a one-day event, but a gradual process.

Panko suggests a step-by-step approach. “Be clear on what you want, who is involved, and what your goals are. Then take small, manageable steps.”

Families must agree on the farm's capacity to employ full-time or part-time labour, and on how equity translates, she says.

“For instance, can part-time contributors convert sweat equity into ownership? What is the cash flow outlook for retirement or asset expansion? These conversations avoid unrealistic expectations.”

She says clear communication is the most vital tool, allowing families to navigate disagreements and prevent relationship breakdowns.

“If you have good communication and governance, you can solve almost any problem. Everyone must be able to share their input, feel heard, and understand decisions.”

Families should regularly revisit and update expectations, including the timing and method for converting sweat equity to ownership and how the time value of money and estate planning factor in.

Succession plans must be integrated with wills, powers of attorney, and tax strategies. Valerie warns, “If the estate plan doesn’t align with the farm succession plan, conflicts and legal challenges can undermine the best-laid plans.

“Succession planning is not about handing over the keys because you have to; it’s about passing the torch thoughtfully, making sure that the next generation is ready and that everyone’s contributions and concerns are valued.

“When you start with respect, transparency, and communication, you build a foundation for not just a successful farm transfer, but for family relationships that endure.” BF