Running a farm business can be fulfilling for the whole family but it’s vital to be prepared for the future by putting a succession plan in place.
Often overlooked, succession planning is an essential part of running a family farm as it means your assets are protected, safeguards your business and ensures that your family will be provided for.
Here, CWC highlights the important factors to consider when putting a succession plan in place for your estate.
Why is it so important?
You might think that succession planning is just about putting things in order in the event of your retirement, but actually, as a process, it goes way beyond that. By looking ahead, you are essentially planning your business legacy and will be ensuring a smooth transition for those who will run the business once you step down whilst also enabling you to ensure your hopes and dreams for the business are acted upon accordingly.
Who should be involved?
The first, and arguably the most important step in succession planning is discussing the matter with your family. It may sound obvious, but ensuring communication starts at an early stage and continues throughout the process is integral for a plan to be successful.
Everyone who will be affected by your decisions should be included in discussions and, whilst it may not seem necessary, it is often a good idea to bring in advisers at this stage so you can be sure you are talking through the most appropriate methods and have a clear insight of all available options.
What should be included?
Succession planning goes a lot further than simply establishing who will own the farm at a time when you step away from the business. There are many other things to include to make sure it a comprehensive plan that will be future-proof.
Where multiple family members are involved you will need to consider how the assets of the farm are owned, how each member of the family will benefit from the farm and what each person will do to run the farm, both in the short and long term.
Additionally, it should detail who is occupying which buildings and what the arrangements are for different areas of land. It should also set out a plan for mentoring and training future generations which will then inform how you will take a step back.
Who will own the farm?
Without a doubt, ownership of the farm is one of the most common things that people think of when it comes to succession planning. This forms a vital piece of the puzzle and ensures ownership is passed in a way that you would like it to.
As part of this stage, you should ensure all members of the family have wills in place to protect the business. You might also consider making a shareholder agreement, or a prenuptial agreement which takes into account matters of divorce.
Getting help from Curtis Whiteford Crocker
At Curtis Whiteford Crocker, we’re well-versed in all aspects of agricultural law and can offer the advice and support you need to plan for the future. Get in touch with one of our offices in Plymouth, Torpoint, Tavistock, Plymstock or Kingsbridge and let us help you look ahead.