I thought we might just talk about some of the issues in relation to succession planning. Most people think it applies just to farmers but anyone involved in a business should be looking at a process of how they are going to hand over the business or the farming enterprise to children or family members. This takes many years of planning and not just when you turn 60 or 65.
People who turn 60 or 65 should be looking at it in any event however, the earlier it is done strategies can be put in place to assist in the smooth change over of enterprises and businesses in the family. Communication is the key.
Having enough money to live on for the rest of your life is important.
Control of assets on a day to day basis is also very important and how this is to be transferred.
Looking after members of the family who are not working in the farming enterprise or family business is also a balancing exercise.
Insurance needs are always important especially in the younger years and/or if the business is carrying any debt. Sometimes Centrelink benefits are an option and these need to be planned for as a minimum five years beforehand.
Increasingly Nursing Home fees and Bond fees are also something that families should be considering in any succession planning and/or planning for retirement.
Superannuation and off farm/outside of business assets are also very important.
Tough times. When times have been tough such as the drought of which the community is still taking time to get over, it is important that communication and owners of farming business and business in town look at the future and what they should be doing and in particular to communicate.
Financial stress is something that can create difficulties and fall outs amongst family members.
There are many specific rules relating to succession which can provide advantages to outgoing owners including capital gains tax relief if funds go into a retirement/superannuation fund. Stamp duty concessions for intergenerational transfers of farming properties. Also concessions in relation to entitlements for Centrelink.
Aired August 2011 on Radio 2RG Griffith