In theory, estate planning is a universal problem with identical technical solutions regardless of whether you’re a farmer or a financier.
The reality is very different. In practice, the nuances of asset size and mix, business speciality (if any), family situation and personality type mean estate planning is definitely not a one-size-fits-all process.
And while passing on assets across generations is more complex than usual in all family-owned businesses, the farming sector probably presents the most complicated set of problems for estate planners.
Farms typically come with long-entrenched family ownership, deep emotional connection to the land, multiple succession possibilities (or points of conflict), a diverse range of underlying assets as well as special tax and/or superannuation factors to consider.
As someone who grew up on a Western Australian farm, I understand the story.
Last year I told financial services industry magazine, Professional Planner, that Integro does a lot of work in estate and succession planning for farming families.
One of the big questions, if not the biggest, we face in designing farm estate plans is whether it’s “best for the family for the wealth to stay together, or is it better that it actually is divided up”, I told the publication.
But after addressing such fundamental issues, on-farm estate planning also requires expert technical financial knowledge delivered either in-house or via a number of trusted third-party professionals such as lawyers, agricultural business advisers or accountants.
We maintain a range of professional relationships to ensure any estate plan is watertight and put together with maximum efficiency and minimum fuss.
Most people, of course, understand that estate planning begins with a will – even so, estimates of Australians who haven’t met that basic requirement range between half and 70 per cent.
Where there’s a will, there’s way more items to pack into the farm estate planning kit including:
- Enduring powers of attorney; business structure – to trust, or not to trust, for instance; succession lines – who, if any, of the next generation will take over the farm and how to equitably treat those who don’t stay in the business
- Life insurance – how much, and what kinds, of cover are needed; gifting strategies – consider the tax benefits, and risks, of a gradual transfer of farm ownership; and, super-sizing – how to use superannuation, including self-managed super fund, structures for estate purposes.
Everyone might have a theory about estate planning but we have a practice.
Farmers are not the only business group impacted by succession planning needs, chat to your Integro adviser today about how you can build your family’s financial future. For new clients, please email our team at: [email protected].
You can also grab yourself a copy of Farm Weekly to read more insights from our Managing Partner, Justin Gilmour, every fortnight.
