Farm successions can be a thorny issue – not least if the parties involved can’t bring themselves to talk about it.
A wide range of issues can halt meetings, cause emotional upset or family division and prevent farming families getting a sturdy succession plan in place.
To try to get out of these ruts, young farmers at Farmers Weekly’s Fertile Minds conference last week discussed what they could do.
With the support of Gary Markham, farm adviser at Churchgate Accountants, Sean McCann, financial planner at of NFU Mutual and Tim Russ, solicitor at Roythornes, the group talked through different scenarios.
Here are their tips for a smooth succession.
You need to buy out non-farming family members, but don’t have the cash and don’t want to break up the farm.
- Understand the needs of all parties
- Manage expectations of siblings, cousin, and so on
- Get a second job to finance it, particularly if it’s a smaller farm
- Make sure the farm’s partnership agreement and partner’s wills are synced as the former always overrides the latter.
Whenever the succession issue arises, no one wants to talk about it or an argument erupts.
- Start by asking what your parents and other partners want and need
- Agree a deadline for a succession meeting
- Understand who owns what and define the value of assets
- Identify everyone’s business roles
- Widen the conversation to inheritance tax planning
- Ask to sit in on the next farm accounts meeting and use the opportunity to ask questions
- Ask your accountant or farm business advisor to mediate during a succession meeting and talk through the options
- Understand what your parents’ succession experience was like
- Mothers are often the key to sorting out succession issues!
You know you are capable, but are finding it difficult to make others see it, especially if you are a female farmer fighting against gender stereotypes and discrimination within the business and or family.
- Find your niche – concentrate on your strengths, but show you can take on a challenge.
- Aim to make improvements on the farm in small steps – don’t try to change everything at once.
- Think about what you can bring to the business.
You want to join the family farm, but are not sure the business could support an extra person or family.
- Ask if the business is viable going forwards in general
- If you are currently working elsewhere and receiving a salary, could you cope with a likely reduced income
- Would you be willing to change your lifestyle
- Know what all the assets are worth, who runs what and what would be left under different succession scenarios