Succession planning is far more than just a business transaction; it can be an extremely emotive and challenging time for all concerned, however, if properly managed it can be a very positive and rewarding process.
Today it is often difficult for children of farmers to take over the family farm. Farm equity is often the default retirement plan for farmers, and financing for the next generation wishing to buy the farm can be difficult. Equitable distribution of inheritable assets to multiple siblings can be an issue. Understanding rules related to taxes, land transfers, incorporation, etc. can be extremely important, and there are numerous interpersonal and values issues that often need to be dealt with in succession arrangements.
Sometimes rapidly changing circumstances can mean loss of the farm and this can be traumatic as the farm may have sentimental as well as economic value.
Seeking professional advice and planning long before you reach retirement age is the best way to avoid the difficult and stressful time of succession when it comes.
The succession planning process may involve multiple discussions to understand the expectations of each family member, or, it may even need negotiation with family members to repair relationships.
Our role in this process is variable depending on your needs but may involve some of the following:
- Identifying the need for succession planning
- Advice on mediation and clarifying the issues
- Presenting options and explaining the process
- Assisting with profit and loss statements, balance sheets, assets and liabilities
- Providing referrals to other advisors where necessary
- Identifying and gathering the appropriate documentation
- Attending meetings and managing the process
Farm succession is challenging because the farm is...
And there is a lot at stake...
- Your home
- Your occupation
- Your business
- Your way of life
- The future of the farm
- The financial future of the business
- The financial well being of the people involved
- Life pathways for the people involved
- and most importantly ...... Family relationships
1. Start the process of succession planning early, talk to the family and get good advice.
2. Early planning may help avoid losing the farm entirely should a crisis occur.
3. There may be ways to share your assets among your children more fairly, even if only one stays on the farm.
Make an appointment with one of our staff for a chat about farm succession – where you are at, where you would like to be and how to get there!