4 Crucial Steps in Farm Succession Planning

Posted on: September 22, 2014
Posted by: Daniel Budreika

Succession Planning for FarmersFarming family members that work together may get along quite well, but often the important issues of ‘who gets what’ down the track can be grey and are never discussed in any detail.

In many cases the parents have something in mind, while their successors might be assuming something different.  It all comes down to communication and planning.

It is important that this process is started early on your own terms, while you have time and health on your side.

4 Crucial Steps in Farm Succession Planning

1. Think about your own future first before helping your kids

One common mistake we see is parents trying to set their children up without taking into account their own needs first.  Important questions you need to ask yourself are:

  • When would you like to ‘retire’?
  • What will your income needs be in retirement?
  • How could this be generated?
  • Where do you see yourself living?
  • How involved do you want to be on the farm?
  • Avoid making big promises to anyone without a plan first.

2. Talk to your family members

Formalise the subject by allocating a time to meet or discuss your farm succession plan.  It’s no good trying to broach this topic while you are shearing or at Christmas lunch.  Time needs to be set aside properly.  If family members are living long distances apart, perhaps begin by sending everyone an e-mail, simply to say that you want to start the discussion.  That way everyone is receiving it at the same time and is given the opportunity to respond accordingly.  It’s important to know what each person is thinking and feeling.  This is also a good time to start building or repairing any of these relationships.

3. Seek independent advice

Family members and stakeholders are often too close to achieve a good result.  We find it works best when someone impartial outside of the family and experienced in dealing with rural matters is involved.  Their job should be to help open up the lines of communication and identify strategies to deliver the best results for everyone’s objectives.

Things that should be addressed are:

  • Ownership structures
  • Taxation
  • Qualifying for Centrelink
  • Insurance and agreements.

4. Create a plan and review it regularly

Once all parties are on board, ensure you have a clear course of action and who is responsible.  Set out your ideal timeframe and expectations of those around you. Seasons and circumstances will continually change so it is vital that the plan is reviewed regularly.

242 Glen Osmond Road, Fullarton SA 5063
Phone: (08) 8333 0790 | Fax: (08) 7200 2647

© 2019 Planning for Prosperity All Rights Reserved • General Advice WarningPrivacy PolicyFSG / Fee Insert • Site Map • Website by VERSION

This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. We strongly suggest that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances. You should read the PDS and consider whether the product/s is right for you. Past performance is not a reliable indicator of future performance.

Strategic Advice Solutions Pty Ltd (ABN 86 619 221 662) t/as Planning for Prosperity is a Corporate Authorised Representative
of Infocus Securities Australia Pty Ltd (ABN 47 097 797 049) AFSL and Australian Credit Licence No. 236523