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Australian family farms and rural regional businesses have a poor track record in carrying out successful succession planning. Research suggests that almost half of existing family farms have not even discussed succession planning with their spouse or their family.

Australian family farms are generally family-owned and the average working age of the farmer at say 52 years of age which is substantially older than the national average for most industries.

What is Succession Planning?

 

Typically it manages the succession process whereby the family farm passes to, or is divided amongst, family members
Often there are siblings not directly involved in the farming operation who also need to be considered.

 

When should Farm Succession Planning commence?

Ideally the conversation surrounding farm succession planning should commence prior to any of the owners children deriving an income or benefit from the family farm. 

The conversation should always be open and constructive so that it is inclusive of all family members - explore common goals.

A formal succession plan should be written at this early stage.

 

What aspects need to be considered in Succession Planning for Farmers?

The rights of the senior members of the family to live their twilight years in their chosen manner

The need for all family members to have clarity around the their relative expectations and an agreeance of each others position and outcome in relation to both the business and estate.

 

What outcome should you expect?

To have a common understanding amongst all family members from the earliest possible time in relation to the business succession plan for the family farm / business.

To ensure legal and financial transparency throughout the process.

To have a written documented succession plan which is congruent with wills, power of attorney and business structure.

To provide clear delineation between the assets associated with the "Succession Planning" and assets which may form part of the "Estate Planning"

 

Results:

It is unfortunate that succession planning often does not take place at an appropriate time and is left to the last minute and can become divisive within the family.

The following comments come to us from feedback or survey results from of our Succession Planning works;

  • "... We have a general direction and outcome for succession. All family members have been involved in discussions. Timing and process are yet to be determined, however the transfer of management and financial involvement is already occurring.
  • "... sometimes it is a combination of factors affecting decision and each farm is different with financial and family to be taken into consideration ..."
  • "... I think succession planning is the right thing to do. It takes much time, thought & input from all members but once completed, all the family knows what the future holds & can plan their lives accordingly ..."
  • "... 3 years ago our farm completed a formal plan. Our kids are too young now for succession discussions. It is something we will actively pursue in 5-10 years time ..."
  • "... Our consultant had an excellent “feel for” and understanding of farms and families. He was pleasant, professional, knowledgeable and had the amazing ability to relate effectively with 8 very different personalities. The results of his efforts is that we now have a completed succession plan, which is most gratifying ..."
  • "... was great in pointing us in the right direction we need to go with the farm succession. He was a valuable resource to touch base with from time to time for opinion/direction ..."

Contact us today for assistance with your small business or farm succession planning process.

AgBiz Group

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