There is an old saying that if you fail to plan, you can plan on failing. In every business, planning for the future is critical, and farming is no different. It is essential that every family farm business has a succession plan.
By having a succession plan agreed you will ensure that your assets and business are protected and that your family has clarity on what will happen in the future.
It is vital to remember that succession planning is not just about retirement. A succession plan will set out who will run the business, how the business will develop and how its stability will be maintained.
We all know how difficult it is to attract new, young blood into farming, and having a plan in place that shows your children and other younger family members a clear pathway will ensure they stay within the business.
So, where do you begin? A family meeting is a good starting point, and we have lots of experience in facilitating these. Make sure that everyone who is part of the farm or will be affected by your retirement is present.
What do you discuss at this initial meeting? Sometimes it isn’t easy to see the wood from the trees as there is so much you need to consider. You need to produce a list of all your assets, you need to talk to each member of the family and find out what they want from the farm and want to do in future, you need to agree on the long-term aims for the farm, and you also need to look at the shorter-term.
A critical part of the plan will be focused on ensuring the succession progresses in the way you want it to.
We encourage our clients to start the planning process as soon as they think about taking on less day-to-day management of the business. Doing so can reduce the tax implications. Gifting assets as part of the succession plan makes a lot of sense, and if you live for seven years after gifting an asset, there will be no tax to pay.
If you’re thinking of slowing down, passing your rural business onto other members of the family, and need some advice, please don’t hesitate to contact us.
