I grew up in a large extended ethnic family in the New York metropolitan area. My father was part of the family business that was started by my grandfather. Each of my parents came from four sibling families, and I was one of 16 first cousins, all of whom lived within a ten-mile radius. Until the end of grammar school I spent entire summers in the same house with six of my cousins. So I understand from direct experience what it’s like to live in an environment of a multi-generational family. It’s not that my relatives were invasive; they were just omnipresent.

A few years ago, in my capacity as a lawyer, I was called by a third-generation farming family. The family consisted of four siblings and their spouses, all of whom worked on the farm. Each of the siblings had a house on the same property and worked under the guidance of the patriarch, while the matriarch ran the farm office. Now they had some conflicts that needed sorting out. After spending a morning listening to them, I suspected they were all suffering from my family’s old malady: “claustrophobic togetherness” as well as a clear agreement around how they would handle finances.

My intuition and experience told me that their conflicts would move toward resolution if they created a specific agreement setting up some rules about how they would communicate with each other around family finances. This reflected my highest ideal: that if you have conflict, the best resolution is a new agreement for the future. I have found that is the best way to get around the useless need to determine right / wrong, win / lose, and fault / blame. But this solution only works if everyone is willing to forgive and let go of old conflicts. More important, it’s the best way to create a positive outcome around what are often difficult conversations for people to have.

Speaking of difficult conversations, in my experience the reason people resist these “difficult” conversations is that they do not have a clear, effective yet simple template to follow so they know exactly what to talk about. Time after time I have found the following ten elements provide that

easy to follow guide.

Here’s the agreement we designed:

Smithfield Family Agreement

1. Intent &vision. It is our intention to reduce the tension and friction between members of this family. Our vision for the future is to have an effective family farm operation that a) we are proud of in terms of our reputation; b) is satisfying in terms of our relationships with the people we work with; c) is financially rewarding in terms of both current income and asset appreciation. In this agreement we want to clearly spell out how we will handle our joint finances.

2. Roles. We all recognize the complexity of our roles, relationships and stereotypes. To each other we are siblings, spouses, parents, in-laws, bosses, direct reports, and co-workers. We see that the opportunity exists for all kinds of tension and turmoil if we do not stay mindful of the complexity we are living in. From now on Alex will act as person with the primary responsibility for handling family money. He will collect everyone’s earnings and pay all of our bills.

3. Promises. We each promise to do the following:

— To become learners and observers of each other, and to recognize our mutual opportunity for learning, personal growth and financial reward.

— To stay mindful that we must let go of our childhood perceptions and prejudices about each other.

— To realize that the only way we will be able to survive and keep the farm is if we treat each other as adults, and treat the farm as a business, requiring everyone to act as if this were a business.

— To cancel our annual two-week “family” vacation for the foreseeable future, because what we each need right now is some space and vacation from the intensity of our multi-layered relationships.

— To seek recreation and friendships outside of our family.

— To treat each other with dignity and respect.

— To actively listen to what others are saying.

— To think about what is fair and best for everyone in a situation

— To develop a spirit of teamship

— To honor and acknowledge what our parents have built for us

__ To recognize that, given current economic conditions within the farming community, if we do not pull together we will lose what we have

— That we will give Alex our earnings

— That Alex will pay all bills that follow the budget he has prepared

4. Time and value: We hope to keep this agreement for the foreseeable future. We all agree to live within these promises for one year, after which we will assess whether we should continue.

5. Measurements of satisfaction.

— Everyone is speaking to each other.

— No slamming doors.

— Reduced anxiety and tension.

— Absenteeism improves by 50% within six months.

— Profits improve by 50% within one year.

— We begin to voluntarily socialize with each other.

— Renewed appreciation for each other’s unique gifts and contributions to the family enterprise.

6. Concerns and fears:

— That we won’t be able to get beyond our emotions and step fully into today, and adulthood, to realize what is possible.

— That all of us won’t be able to learn fast enough.

— That we have done too much damage already.

— That it might be smarter to divide or sell the farm.

— That all of us are not committed to making this work.

7. Renegotiation / dissolution. We all recognize that operating within this new context is an experiment that will likely need renegotiation and coaching as we discover how each of us reacts to it. We understand that we are trying to create new operating relationships and that we must be “fluid” if they are to succeed.

8. Consequences: We have the potential to lose our way of life, our family and our livelihood.

9. Conflict resolution. We will talk with each other; we will talk with our farm manager and good friend Ralph; we will call our lawyer, Mr. Levine.

10. Agreement: Yes, we have little choice given the risk of loss.

Three years later I was contacted by the oldest son. He wanted me to help the family decide how to divide the proceeds from their farm, which had just been bought by a large corporate agribusiness. I am pleased to report that this wasn’t a difficult facilitation. Although the farm didn’t survive as an independent entity (which was perhaps inevitable), the ground work we had done in opening up communication now facilitated a real dialogue about everyone’s future needs. All were satisfied with the end result.

As this situation points out having clear agreements around finances is essential for both financial and emotional health. Without clear and expressed agreements and promises it is impossible to survive.