Farm Succession Planning
A farming enterprise involves a livelihood, often one that has passed through generations and weathered many storms. There is much to consider and sound legal guidance is essential when considering how your farm will be handled by future generations.
We have a wealth of knowledge in rural enterprise and property, having worked on many large and complex transactions. We enjoy working with rural families to address their succession planning and can help you to implement a plan for future generations that complements the many years of hard work that you have put into your land.
What is farm succession planning?
A farm succession plan is a strategy setting out the processes that will be implemented to sustain the family farming enterprise, so it can be passed on to future generations. A succession plan should support the viability and longevity of the farm, provide a retirement plan and financial security for retiring family members, and deliver workable arrangements for remaining and incoming members.
A farm succession plan typically involves complex financial, legal and personal considerations including:
- the individuals involved, their financial and family circumstances, skill, experience and objectives;
- the goals, circumstances and objectives of retiring members;
- the most appropriate legal structure to support long-term goals, protect assets, minimise tax and facilitate intergenerational duty exemptions which may include the use of family and other trusts;
- ascertaining the value of the farming enterprise using an independent party;
- working with accountants or financial advisers to deliver the most effective financial outcomes;
- consideration of individual estate plans to ensure they are consistent with the overall farm succession plan.
Typically, a farm succession plan may involve:
- transferring real estate and assets to family members;
- selling off assets such as equipment, livestock or parcels of land;
- leasing/licensing land and equipment;
- restructuring farming operations.
These transactions must be properly documented so that the ownership and title to assets is clear and the rights and responsibilities between family members understood. All transfers should consider any duty and taxation implications.
We understand that each farming enterprise is unique, as are the families that run them. We have helped many rural clients achieve workable succession plans tailored to their circumstances.