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  • This is a fantastic article from Coach Approach Rural, who several families I know have used and found fantastic 0_1488749463675_The Orchardist Feb 2017 - Facing the fear, family & future.pdf

  • Comments

  • Has anyone made a New Year resolution to start/continue or complete their farm succession plan in 2017?

  • The festive period is upon us - we will be spending lots of time relaxing with family and friends - while it is probably not the best of times for a succession meeting it might be a good idea to think about what you want in the coming year(s) and to put a plan/goals in place. Remember it will not happen over night and often you may take two steps forward and one step back...but with clear communication and organised meetings you will get a resolution in the long run - Good Luck

  • @Abi @Sean-Bennett meet with the accountant last week to discuss last financial year. Succession was also discussed. Funny how parents react differently to the same ideas bought up by the accountant vs their son! It was constructive tho and hopefully will get the ball rolling and continue the discussions we have already had... next job get the lawyer and bank manager involved!

  • @hardgraft Great stuff - also don't forget to utilise your team of professionals - Bank Manager, Accountant, Lawyer - they will have experience and may offer a suggestion that you or your family have not thought of. Our Bank Manager was a huge asset when we discussed succession - and the best thing was we did not have to pay for his assistance - but when the time came for us to borrow money from the bank - we had a great relationship with the Manager and there was no question of us using another bank - so a WIN WIN situation!

  • @hardgraft Can empathise with you here. Starting the conversation is the hardest part. I quite often play the role of facilitator pulling the parties together. I always talk to the parents first then it`s a matter of talking to all the affected stakeholders so I have a clear picture of what each wants/needs out of the process. When we bring everyone together it is really important to have a set agenda to keep everyone on track and whoever is chairing the meeting needs to be strong enough to keep keep control. This is where having an independent facilitator can often be an asset. As you no doubt know it is a very emotional process for all involved and can take sometime to get an outcome that everyone is agreeable to. If your accountant is not pushing the family to sit around the table and discuss what the future looks like then you need to ask some hard questions of them.

  • @Abi Yes, exactly. Am working on formalizing our meetings a bit more, getting an agenda set out so that prior to the meeting everyone can think about the topics that are going to be discussed and formulate an opinion etc. The hardest thing I find is finding the time/prioritizing succession talk over day to day farm work (especially at this time of year!). Have printed out and read the articles that @batley-o and @LisaL shared. Might pop them under Mum and Dad's door! Will keep you posted with any developments!!

  • @hardgraft Timing is really important - when to have the conversations. Our succession planning happened over a 10 year period. We found that scheduled meetings with all concerned parties at a designated time and place with an agenda where the most productive meetings. Talk through with your immediate family what you need/want , ask other family members what their needs/wants are and then put a proposal to the parents/ other may not be successful but it starts the conversation. Good luck!

  • FARM SUCCESSION (it's not a dirty word!)
    Christine Donald - Director
    Donald & Associates Ltd - Chartered Accountants

    We have run seminars on succession planning and given the response we have had it is obviously a subject on the mind of many farmers. While it is a little difficult to summarise past seminar content we thought we would give three reasons why farmers (even if they are in their forties) need to start thinking about it.

    Firstly – farmers are getting older. The average age of NZ farmers is 58 so this means 50% are over 58 and still working into their seventies. A lot would love a son or daughter to come home to the family farm so they can wind down slowly and still have an active role without doing all of the hard work.

    The trouble is children are no longer prepared to spend their productive years working on the family farm without any likelihood or a guarantee they will eventually take over. We all know of really unfair situations where usually a son has worked on the family farm, often for a pittance, until Mum and Dad die. Then when he is in his 50s or 60s he has to take on a mortgage to pay out his brothers and sisters.

    The second reason is where a farm has been in the family for generations there is often an emotional and a moral obligation to keep it in the family. Often the non-farming siblings are happy for this to happen and they can come home for holidays to the family farm. In the past this has often gone the other way and there are probably a few farmers out there who never really wanted to go farming but felt obliged to. This generation is not so inclined to do that.

    Thirdly, and this could be the overriding reason to get a plan started early, parents do not want to see it all turn to custard. The legal fees on their own, if a case goes to the high court, can be up around a couple of hundred thousand dollars, and nobody wins. But in a properly structured succession planning process everyone’s viewpoint is taken into account, every family member gets their say and disputes and complications can be sorted out quickly and effectively.

    A court case causes heartache and stress and families are torn apart. Many cases have hit the headlines and we are sure that all farming families know of at least one instance where family members are not talking to each other. Often parents no longer see some of their children and grandparents do not see their grandchildren. It is all very sad.

    The attitude that “they can fight about it when I’m gone” is burying the issue. It is also sad when there could easily have been a successful succession, keeping everyone happy, that does not happen just because the parents think it is too hard.

    Christine Donald is the Principal of Donald & Associates Limited. She has a personal involvement with her own sheep and beef operation and has a particular interest in farm accounting and benchmarking. Christine has vast experience in farm and business succession issues, business restructuring and business planning. She enjoys helping her clients achieve their business and personal goals.

  • @batley.o Thanks very much for sharing those links ...I'm sure that for people going through succession they will be very useful.

  • @Abi Abi, you have have a file on Succession planning by George Collier but here is a link for anyone. Presentation detailing suitable structures for asset protection and succession planning by George Collier to NZIPIM conference in December 2004 - Also Succession presentation by George Collier presented at New Zealand Law Society Conference in 2007. on the family farm.pdf

  • @Abi Hi guys. I am farming sheep and cattle with my parents. We have been self-navigating the succession topic/issue for many years with mixed results! I have a young family and have been thinking about the future lately. Never an easy topic to bring up. I always find myself getting emotional and feeling uneasy. Communication is definitely key. Have raised the idea of succession advisors a number of times but find resistance. Probably because my parents are quite private people, and have advisors in the form of our lawyers and accountant. Will have to read some of the info you guys have recommended.

  • @batley.o - I have also come across this book. Very easy to read and In some situations, with clients looking at succession and ownership structures I have given them a copy. I order a few through whitcoulls a few years back, not sure if this is still possible - worth a read by all young family couples.

  • @batley.o - I have also

  • Is there anyone willing to share their story of Succession? Good/Bad or indifferent!

  • "Keeping Farming in the Family" is an authoritative book as a guide to farm succession written by Rural practice lawyer Ian Ross Blackman. 180 pages of easy reading with anecdotes. Available to purchase from the author.

  • @Sean.Bennett thanks so much for that Sean, very interesting stuff

  • Here is an article from earlier on in the year about alternate options for those looking to exit their farming business along with a yarn with Jamie on The Farming Show.

  • Just came across Mark Stevenson's Kellogg report on succession. Definitely worth a read

  • Succession requires a good team around the farmer, each looking after the various parts and that team can vary from case to case. In some cases we act as the facilitator and farm accountant but in other cases we realise an independent facilitator is necessary. Paying off a farm is a generational exercise so it pays to start your plan early. Talk with the whole family early on, to ensure the sense of entitlement is clear and adjusted if necessary. We wrote an article recently on this topic here

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