I am planning to retire. What do I need to consider in my estate planning when passing down the family farm?
Succession planning involves thinking about the impact of retirement on your family, and on your business. It means thinking about what you want the future to look like and how this may impact a wider group of stakeholders.
When it comes to agricultural businesses there are many challenges
- how to hand a farm/property over to one (or more) of your children
- cashflow and tax impact of how that will work
- what happens to the remaining children or dependents if they choose not to work in the business.
It is a common dilemma because most farms in Australia are owned and operated as a family business. Without careful planning, conflicts and unforeseen costs can quickly arise. Many leave succession planning to the last minute due to it’s complexity or they don’t want to face possible family issues.
However, the outcomes are likely to be much better if discussions and planning start earlier. Our advisors can assist you and your family to run a formulated process which allows you to work out your retirement goals and the future business operations.. This gives everyone an opportunity to share their views and expectations. By undertaking this collaborative planning process years out from the sale of a farm, or retirement, it allows all members of the family space to consider their plans without fear or worry. This leads to reduced tensions and a plan that provides a detailed timeline for handing over the business, key milestones, and any other financial arrangements.
In a perfect world, we would know exactly when we are going to retire and for how much longer we plan on being on this planet, but it doesn’t always happen like this. Should you retire or leave us earlier than planned, it is a good idea to give succession planning the same importance as preparing wills and other legal documents.
To start this process or have a simple discussion on what you need to do, contact your dmca advisor to see how we can help.