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Farm Succession / Inheritance Planning
While many farmers inherit their land on the unspoken understanding that they will care for and tend it for the next generation, due to the sensitivities and complexities of farm planning and inheritance, many farmers do not adequately plan for succession.
Farm succession planning involves the transfer of elements of the farm business from one generation to the next in a controlled and staged manner, allowing a gradual handover of labour and responsibilities and, in time, the transfer of management of the farm, and some or all of the its assets.
By proactively planning for succession and inheritance, you can better preserve the integrity of your farm into the future, and family relationships.
Outcomes of successful farm succession and inheritance planning include:
• Security of retaining ownership of assets while slowly transferring management of the farm business.
• Knowing your family has been looked after.
• Financial viability of the family farm to the next generation.
• Shared risk and farm management, allowing you to gradually step back from elements of the farm business.
How does Farm Succession Planning Work?
Farm succession planning is a structured process that consists of several stages, each of which has a different focus and set of actions.
As the Mediator, I support the farm owner and their family in working through each stage of the process, facilitating discussion of what can be emotive and sensitive issues. Throughout the process, I facilitate the examination of information and help identify and examine key concerns and obstacles and explore options and possibilities.
Access to experts throughout the process, including agricultural/farm advisors and legal and financial experts allows for informed decision-making and sustainable outcomes.
As relationships, roles and expectations among family members can significantly influence the success or failure of the transition process, all adult children of the farmer and their spouse are included in the process.
Communication is key to successful farm succession. A shared understanding of the concerns, needs and goals of each family member allows for more meaningful discussion and decisions that reflect the values of the farm owner and their spouse, and the particular circumstances of their family.
Topics discussed include:
- The priorities of the farm owner and their spouse
- The concerns and goals of each of their adult children
- Future care needs of any dependents
- Ability and willingness of identified successor(s)
- Arrangements for other adult children or dependents
- Living arrangements – the farm house is often integral to the farm business
- Financial security of the farm owner and spouse in the short, medium and long term
- Financial burdens on the successor(s)
- Timings of stages and supports required for each stage (e.g. upskilling/training)
- Communication, reporting and problem-solving mechanisms to support the farm owner and their successor(s) as they implement the plan.
How Successful is Mediation?
While farms are often transferred to a son, daughter or other close relative, if you do not have a successor, other options such as a Succession Farm Partnership, share farming, leasing or part sale can be explored.
For queries or additional information, please contact me
Effective communication is the key ingredient to successful [farm] succession planning. It allows for family members to share concerns, decide on options available and what actions to take. It also allows for effective planning and helps prevent disputes, misunderstandings and unnecessary anger.
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