Farm succession – food for thought
One of the hardest things to do in regard to ‘farm succession planning’ is getting started.
The following is in some way a guide to getting the planning happening.
(a) Make a list of all your assets and liabilities;
(b) Ascertain how the assets are owned, are they owned by you as individuals or by a trust or a company.
The ownership is important as it will have an impact on what you do with the assets, which may well shape your thinking.
(c) Ascertain the values of each asset. Be realistic with the values used for your assets.
This process will give you your net worth.
From this you can start to plan where you would like to see asset (& debts) allocated to you, remembering at this stage it’s a draft plan of your ideas nothing is set in stone and plans can be changed as required.
It is often a worthwhile process at this point to engage the help/advice of your advisor or an expert in the succession planning field.
This should help you determine whether your “thoughts” are able to be done or whether you need to change things (ie. due to the way an asset might be owned).
Your advisor may well have additional thoughts in respect of what might work well and what might not.
The aim is to develop a draft plan that you are comfortable with that you can then discuss with the family.
Some key points to remember:
• The process can take time so be patient.
• Be prepared to make changes along the way.
• Be respectful to each other in family meetings.
• Once you start don’t stop.
• Keep an action plan of things to do.
• Engage advisors to help you with the process.
• The process needs someone to “drive” it otherwise it will stop when or if things get complicated.