Early plan vital to deal with farm succession
As Freddy sits down to dinner, he rubs his aching head. “We really do need to sort out what we are going to do with this farm when we retire” said Freddy as he glanced down longingly at his roast beef and Yorkshire pudding.
Just then Pebbles (Freddy’s lawyer daughter) joined her parents for dinner.
“Well Dad,” said Pebbles, “I am pleased to hear that you are starting to think about these things. There is a lot to think about.”
“I know” said Freddy “that’s why I have a headache.”
“The first thing you need to think about is what you and Mum want” said Pebbles.
“But Pebbles, it is not just about what Mum and I want. We are concerned about you and your brother Joe and we want to be fair to both of you. I know Joe wants to farm this property but it would not be fair if we left it all to him when we die and you did not get a fair share of what we have built up over the last 40 years” said Freddy.
“Dad,” said Pebbles. “It’s not a good idea to wait until you die. You need to formulate a plan now to transition the farm to Joe so that he is farming and taking ownership of the farm long before you die so you get to have some fun in your retirement.”
“The plan needs to look after you and Mum, Joe, and me, and it needs to be flexible so that if things change in the future in ways that you do not expect now, the plan can be adapted so that it still works for everybody.”
“What sort of changes are you talking about Pebbles?” asked Freddy.
“You see Dad, you are running a farming business but that farming business operates in the context of our family” said Pebbles. “Just as things change in farming, like droughts and export prices, things also change in families.”
“For example, what if Mum died and you remarried? Your plan needs to be able to adapt to that. Alternatively, what if in 10 years’ time Joe decides that he does not want to be a farmer and he wants to do something different? Your plan needs to be able to deal with that as well.”
“Gee Pebbles,” said Freddy “This is sounding complicated. I think I need some help.”
“Yes, you need to talk with professional advisers who can help you come up with a plan that will work for your farming business and our family” said Pebbles.
“Venture Taranaki has funding available through the New Zealand Trade and Enterprise Capability Development Voucher Scheme to help farming businesses access training about how to future-proof and transition their business to the next generation using appropriate business structures and good governance. There is training available right here in Taranaki” said Pebbles.
“I received an invitation the other day to an information evening about Future-Proofing, Transitioning and Good Governance for farming businesses” said Freddy. “It is hosted by the Institute of Directors and Venture Taranaki at 6.30 pm on 20 June 2013 at the TSB Hub in Hawera. I think I will go along.”
“Good thinking Dad but you need to take Mum and Joe along and I will come too. That way we can all think about this together” said Pebbles.
“That’s a great idea” said Freddy. “My headache is gone already. Thanks Pebbles.”