Plan ahead to save the fam­ily farm

Mansfield Courier - - PROPERTY - By RHYLL McCOR­MACK

AUS­TRALIAN pro­duc­ers are be­ing urged to dis­cuss suc­ces­sion farm plans now, be­fore it is too late.

More than half of Aus­tralian farm own­ers are over 55 years old, and a re­cent study of more than 350 fam­i­lies on the land con­ceded that the large ma­jor­ity hope to be re­tired within 15 years.

How­ever, the study – com­mis­sioned by the Charles Sturt Univer­sity and i n con­junc­tion with the busi­ness ad­vi­sory firm Chap­man East­way – also showed that de­spite an in­ten­tion to re­tire, many farm own­ers had not dis­cussed their prop­erty’s fu­ture with the next gen­er­a­tion.

The re­port warns that those who do not pre­pare risk di­vorce, fam­ily fall-outs, farm sales and even court bat­tles.

‘Aus­tralian Farm­ing Fam­i­lies: Suc­ces­sion and In­her­i­tance’ is avail­able on line and of­fers a va­ri­ety of tips and hints on how to roll the prop­erty from one gen­er­a­tion to the next.

One fam­ily lead­ing the way in suc­ces­sion plan­ning is Bill and Sue Par­sons.

The Par­sons spoke to the Courier back in 2014, their farm­ing plan al­ready in full swing.

The fam­ily had taken charge of their fate and ini­ti­ated round ta­ble dis­cus­sion with both their chil­dren, Sam and Sally, and their re­spec­tive part­ners and fam­i­lies.

They had also sought le­gal ad­vice on how to make the tran­si­tion fair for all in­volved, as well as to en­sure it was a re­flec­tion on what all the Par­sons fam­ily mem­bers wanted.

The Par­sons are a lead­ing ex­am­ple of how ef­fec­tive suc­ces­sion plan­ning can be, with many who do not dis­cuss the mat­ter end­ing up in court.

Aus­tralian Farm­ing Fam­i­lies: Suc­ces­sion and In­her­i­tance also looks at in­ter­gen­er­a­tional changes in at­ti­tudes to­wards fam­ily busi­ness own­er­ship and how this af­fects suc­ces­sion plan­ning, as well as the con­se­quences of in­ad­e­quate suc­ces­sion and re­tire­ment plan­ning.

Chap­man East­way prin­ci­pal and chief ex­ec­u­tive of­fi­cer, Sean Cor­tis, said the re­port high­lights many crit­i­cal is­sues farm­ing fam­i­lies need to con­sider when de­vel­op­ing a suc­cess­ful plan.

“The ma­jor find­ings of the re­port pivot around sig­nif­i­cant so­cial and in­ter­gen­er­a­tional change in ru­ral Aus­tralia,” Mr Cor­tis said.

“We’re also see­ing growth in the like­li­hood of di­vorce and the preva­lence of non-tra­di­tional fam­ily struc­tures.”

Mr Cor­tis said the re­port re­vealed that more of the younger gen­er­a­tion is pur­su­ing fur­ther ed­u­ca­tion or tak­ing a ‘pro­fes­sional de­tour’, such as a ter­tiary ed­u­ca­tion or a trade, with the av­er­age age of those re­turn­ing to the land be­ing 27 years.

“Aus­tralian farms are gen­er­ally not large enough to sus­tain more than one fam­ily, and we know that two thirds of suc­ces­sors are ex­pected to work off farm to sup­ple­ment farm in­come,” he said.

Un­for­tu­nately, the study also found that those who did not ad­e­quately plan ahead of­ten found them­selves in a po­si­tion where the farm was sold off to avoid fam­ily con­flict.

Pro­fes­sor in fi­nance at CSU, Adam Steen, said the re­port pro­vides help­ful rec­om­men­da­tions to the agri­cul­ture sec­tor to sup­port the han­dover of farm own­er­ship.

“The cur­rent gen­er­a­tion of farm own­ers re­mains largely re­luc­tant to re­tire; a harsh re­al­ity when cou­pled with the fact that only 54 per cent of fam­i­lies sur­veyed pos­sess a for­mal busi­ness/ suc­ces­sion plan,” Mr Steen said.

“One of the big­gest is­sues high­lighted is that farm­ers un­der­es­ti­mate how easy it is to ac­cess suf­fi­cient funds for re­tire­ment.

“There is also a sig­nif­i­cant lack of un­der­stand­ing of the le­gal, fi­nan­cial and tax­a­tion im­pli­ca­tions of trans­fer­ring farm as­sets.”

To ob­tain a free copy of the re­port, along with ad­di­tional hints, go to http://www.chap­maneast­way.com.au/wp-con­tent/ up­loads/2016/09/Suc­ces­sionRe­port140916.pdf.

HAPPY TO GIVE: Ma­sonic Lodge mem­bers were happy to do­nate the pro­ceeds of a bar­be­cue held at a re­cent clear­ing sale to sup­port the Dairy Farm­ers of Vic­to­ria. An­nounc­ing the do­na­tion last week were (from left) Ma­sonic Lodge trea­surer Greg Wain­right,...

THE RIGHT IDEA: The Par­sons fam­ily has pro-ac­tively dealt with suc­ces­sion plan­ning from the word go. Pic­tured are Bill and Sue Par­sons with son Sam, daugh­ter in law Rachel and grand­son An­gus.

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