Keeping family relationships… and the farm
What does this farm succession planning process look like, and what is involved?
When thinking about farm succession planning, it’s clear that getting the best outcome for all family members requires a good process. At MediatingWorks we have developed a meeting facilitation process that focuses specifically on preserving family relationships.
But what does this farm succession planning process look like, and what is involved? It’s not always a clear linear path, and sometimes it makes sense to do some things before others. For example it is preferable to clarify personal and family issues and goals before attempting to finalise financial planning, business structures and inheritance.
There is a list of considerations that we like to work through. Let’s go a bit deeper into what’s involved in the broader succession process:
1. First we gather and analyse information
Who are all the people in the family?
What has been the past history and current financial position of the farm?
Who is the best person to take responsibility for collating this information for the family?
2. We then address any family concerns
Will the farm be kept or sold?
Who will manage and have control of the farm business?
Does the plan address the needs of all family members?
What would be the set of family values that can act as a guide to decision making?
What are the needs and aspirations of family members?
What might be the most equitable solutions for all family members?
Which options for the plan have family members understood and already committed to?
3. We then plan a series of family meetings and seek expert assistance of a facilitator
With whom does the family already consult with and does this person have skills to facilitate family meetings?
Who can assist the family to record the outcomes of the meetings?
4. We look at the farm’s capacity and planning for retirement
What is the profitability of the farm and can it generate enough income to support succession and retirement plans?
Are there options to increase farm profitability?
When do the asset holders want to retire?
Do the owners want to continue to be involved with the farm operational decisions?
What income level will leave the owners comfortable on retirement?
Where do the owners want to live in their retirement?
If the owners retire off farm, how much capital will they need?
5. We explore financial planning issues
How will retirement income be met?
What role will superannuation play?
What contributions need to make to my super fund?
Would a Self Managed Superannuation Fund need to be established?
How reliant will the owners be on farm income during retirement?
6. We examine different options for business structures
What business structures will protect assets?
What business structures help minimise tax?
What business structures will support my goals?
7. We make plans around any inheritance issues
Does each family member 18 years of age or older have a current Will that reflects succession and inheritance goals?
Does the business structure support the inheritance goals?
Gregory Dale at MediatingWorks is a Registered Psychologist, and trained Mediator, and is available to act as a facilitator at farm family succession meetings. MediatingWorks advocates the use of a multidisciplinary approach to farm succession planning and working with other professionals who have distinct skills and roles to assist families develop their plan. These other professionals often include a solicitor, a financial advisor and a farm management consultant.
Get in touch to see how we can help build the team that can work on a successful succesion plan for your family.