Andrew Aitken recently contributed to an article in the Toowoomba Chronicle on the issues that arise during succession planning for farmers. Read below for the full article.
“FUTURE PROOFING: If you’re not certain what will happen to your legacy when you die, succession planning might be a good idea.
FARM succession used to be a pretty straightforward thing, back when dad would just leave the farm to the oldest son and split other assets between the rest of the family.
These days a lot has changed and an awful lot of money in Queensland is spent on contesting wills and fighting among family members.
The problem was obviously a big enough one for the State Government to take notice, offering grants of up to $2500 for farmers to get the right advice on their plans.
Andrew Aitken, director of Aitken Lawyers, said the best way to prevent problems was for family members to sit down once in a while and discuss the finer points of how things would work when the farm changes hands.
There were also plenty of ways to ensure all the kids got a fair deal in the succession.
Despite working in a Sydney firm, Mr Aitken dealt with plenty of cases where a family landed in court thanks to less-than-ideal succession plans.
In one case, a son who threw in his engineering prospects to help his aging father on the family farm took his mother to court after his father reneged on a deal they made.
The father and son had nailed down the agreement in front of the family lawyer, but a few years later the father changed the will to leave everything to his wife without telling his son, who continued to pour his efforts into the family farm without realising.
The court found the son’s
case had enough merit to win, but in the meantime plenty of resources were wasted and there was a lot of strain put on the family relations.
Mr Aitken said the first thing for families to consider was sitting down to talk things out and the second was getting legal advice from someone experienced in succession planning.
He said one of the most surprising outcomes of talking about succession planning
was how people often came out with their real hopes and dreams for life.
Sometimes all it took was a good discussion to figure out that the oldest son may have had dreams of a career in another field, while the second son, or even the daughter, may want nothing more than to continue the family legacy on the farm.
And with an aging population, nailing things down was vital.
“The most common problem with succession planning is people not doing it at all,” Mr Aitken said.
“The second most common thing is they do it, but don’t do it well.
“Not doing it well is a big problem because people are living longer, therefore the time where these assets get transferred over is getting later.
“Therefore the children who are going to inherit are getting older and sometimes it’s so late it’s of no benefit to them.
“They spend a lot of their life not knowing what the future holds.”
This could then have flow-on effects of the kids finding careers and lives elsewhere, leaving the family farm to be broken up and sold off when the patriarch dies.
To find out more about the government’s succession planning grants, visit hwww.qrida.qld.gov.au.”
Written by Megan Masters of The Chronicle.