The transfer of assets and managerial control from one generation to the next is a critical period for the family owned farm business and often requires professional help. It is often avoided in farming families, but it could save a lot of bitterness - and money. Stories of family tensions that have been simmering for decades, of disputes between siblings, of farming children leaving the family property, of once profitable farming businesses weakened by acrimony are common.
If any of the example questions below have been thought about in your business then you need to have a succession plan in place, or be working on it.
- Do we want to consider the needs and aspirations of each family member in each generation?
- How will good relationships be built and maintained between family members?
- How will transfer of management, control and ownership of the farm occur?
- Do you intend to retire? What provisions have been made and where will you live?
- Do children want to inherit the farm?
- Do you want to leave a viable farm for the children to inherit? Is this important?
- Do you need to provide for non-farming children?
- What is the anticipated timetable when major management responsibilities are likely to change?
Succession planning can be a major topic addressed within a Farm Business Plan in which the process is more comprehensive, or it can be dealt with as a stand-alone issue. It is a process in which every member of the family needs to express their view and indicate what their long, medium and short term goals are. Experienced farm management consultants can have valuable input to the process due to their unique understanding of farming businesses and families, as well as a knowledge of business structures and various legal requirements. Much of the groundwork can be done with the farm management consultant, with the final advice and implementation of changes that are legal in nature being dealt with by a legal professional.
