As a parent and business owner, you have spent your working life living and working on the farm. You have raised your children and you are blessed to have at least one of your children interested in your work and interested in taking on the farm.
They are married and have their own children. They also live on the farm.
When do you start the succession discussion?
Your accountant may have been saying the word “succession” repeatedly and to you it may sound scary; after all, you are not ready to hand over everything just yet.
There are so many things to consider:
1. What if, in the future, our son decides this farming life is too difficult, wants to sell and make more money doing FIFO?
2. How do we provide for our off farm kids? It’s a bit unfair to give the farm to our son while leaving our daughters with nothing when we pass away?
3. How do we fund our retirement? Do we buy a house in Albany or Perth now for our future retirement? With what?
4. If our son has been working on the farm and not receiving a market wage, do we take this into account?
5. Our son has been working on the farm for many years, he should be entitled to some of the land. It’s unfair if I pass away, my spouse remarries and the land is contested by the new spouse leaving my son and his family with nothing to show for his efforts (ps true story).
6. Our son’s wife has given up her city job to live on the farm and raise our grandchildren. She’s also involved in our business and I would like to acknowledge my son and her efforts.
7. Should our son pay out of the farm profits for the business and the land to fund our retirement?
Having the conversation now while everyone is happy (including any spouses and off farm children) is beneficial. You can start planning for the future. Set goals. Plan for your retirement.
If you don’t have children to pass the baton, we can talk about other options, ensuring you do have a successor and your legacy continues.
With the help of your family office (your accountant, agri consultant, financial planner and your lawyers), we can empower you to ensure a smooth transition of your business and land to the next generation, and ensure the next generation is able to continuing being successful. You don’t have to transition now – we’ll look at the next 5, 10, 15+ years.