Succession & Retirement Planning
Succession planning, when carried out well,
Provides the farm “parents” with a mechanism for passing over management control to the next generation.
Identifies a path for passing over ownership of farm assets.
Identifies a mechanism for providing a retirement income stream.
Provides the second generation with certainty with respect to their role in management control and (later) with farm asset ownership.
The plan needs to be legally well thought through and supported by appropriate business structures and wills.
Plans then provide asset protection in a number of areas (eg tax, marital breakup).
Succession plans provide clarity to everyone with an association to the farm
Succession planning involves a number of steps. Download our succession planning steps guideline. They are not necessarily carried out in a particular order except to say it is unwise to try and finalise issues relating to financial planning, business structures and inheritance, until the personal and family issues and goals are worked through.
In my consulting I focus on the first five steps. Clients are encouraged to consult with their accountant and solicitor re steps 6 and 7. Also in step 5 I work with clients in identifying the framework they are seeking, but clients may seek assistance from their accountant, financial planner, and or broker to finalise their retirement planning.
Sometimes matters are “resolved” in a manner that leads to anger, frustration and a breakdown in family relationships. However this can generally be avoided if the farm family can meet and family members can express their hopes and aspirations for the future and listen to other family members do the same. Such meetings when facilitated well, often lead to a sense of understanding and commitment, arising from mutual sharing of aspirations and interests. The value of such a meeting is generally greatly enhanced if it is facilitated by an external facilitator, who understands farm families and farm businesses, and is a trained facilitator and mediator.
We also help clients evaluate their farm business and its capacity to meet the needs and hopes of family members. We refer clients to their accountants and solicitors to create business structures that support succession plans and protect assets.
Although succession planning can be done as a stand alone exercise, it is best done as part of a business plan. Alan Blackburn and Associates Consulting assists clients with succession planning either as a stand alone exercise or as part of a business plan development.
Alan Blackburn & Associates Consulting assists clients in preparing realistic financial projections which provides a rational basis for evaluating the capacity of the farm business to meet desired retirement and succession planning outcomes.
Alan Blackburn & Associates Consuling will review and finalise business structures, wills, investments, retirement plans. This important step will usually be carried out with your accountant and solicitor. It may also involve your investment advisor and banker. The aims of the succession plan then are supported by legal frameworks and financial plans.
Alan Blackburn takes a team approach to succession planning. We help farm families decide a course of action by assisting clients clarify planning goals. In some instances we assist clients by facilitating family meetings or mediating disputes.
Facilitation of Farm Family Meetings
Alan Blackburn & Associates Consultants facilitate family meetings dealing with succession issues. Alan Blackburn is a trained facilitator and a qualified mediator. He will provide a structured process for conducting the farm family meeting.
structures and inheritance, until the personal and family issues and goals are worked through. The format and length of meeting will vary according to the farming situation and family structure. The meeting will allow family members to express their interest and involvement in the farm and to raise issues to be resolved. Prior to the meeting we ask clients to supply:
Two farm maps, one indicating titles, their size and legal owners, the other showing paddocks and their size.
A statement of Assets and Liabilities (we can prepare this)
Farm projected cashflow (we can prepare this)
Brief history of farm
Your business structure
Family tree (parents, children and spouses, grandchildren and spouses)
We may have a teleconference prior to the meeting which may also be attended by your accountant.
We suggest this meeting is attended by parents and children and their spouses, although this may vary. A larger family meeting can be held at a later date.
Once every detail is sorted out, you may decide to hold a second family meeting at which the detail of the plan is explained and discussed.
Alan Blackburn and Associates Consulting would facilitate this meeting if required.
Farm's Capacity to Meet Family Needs
There is little point developing succession and retirement plans based on false hopes or assumptions. This will only lead to considerable disappointment at a later stage. Consequently an important step in succession planning involves
Preparation of a statement of assets and liabilities based on current values
Preparation of a business plan with projected cash flows
Examination of options for increasing farm profit
Following this you are in a position to make a reasonable assessment of the farm’s capacity to meet family and retirement needs.