When it comes to succession planning farms have been slow in adopting the best practices. Since most farms are family owned, there is usually an assumption that the business has to pass down to the family’s next generation. However this is not always the case as farms can be sold to third parties with no family ties to the present owners.
However, even if the farm is to stay in the family there will still be issues that only correct farm succession planning can deal with. Most often, the difficulty lies in choosing the successor and it getting other family members to buy in to the choice of the patriarch. Whatever the case, if the owner of the farm has a vision to see their farm continue existing long after they are gone, it is only imperative that the right process is put in place to plan for future leadership.
The business of farmingIn most places, the farm business will pass from one generation to another. It is only in rare cases that a farm will be sold to a third party. Most families develop sentimental attachment to their farms and the thought to selling to a stranger can be repulsive. However, while you may not need a stranger, transferring to a sibling may also involve its own issues.
As a farm owner, you probably have an advisor who knows a lot about the business. When you are doing a farm succession planning in Australia, this advisor should be involved every step of the way. Have a discussion with them on what you plan to do and your potential successor. They should be able to advice on the best way to go about it.
It is also important to involve the family members in the transfer process. To avoid ruining the planning process, try to get all family members who have come of age involved. This also means the planning should be started early to ensure that family members get comfortable with the change idea.
Additionally, it will be necessary to explain the business to the family members. Most farmers know a lot about their farms but all this information is stuck in their head. All information about how the farm operates and is managed should be clearly explained and if possible put down in writing.
For the owner who will be handing over control of the farm, they should have a clear plan of what they intend to do after they hand over. This will help ensure that they are properly taken care off in their retirement. It will also help ensure they don’t keep coming back to interfere with the running of the farm. Even if you are the owner, after you hand over, the new head of the farm will not take kindly to you meddling in the daily running of operations.
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