By Phillip “Dibbo” Dibben
“I didn’t think I’d be able to let go, but I have actually enjoyed seeing my kids starting to take over. As we have all worked on the succession plan together, we all agree about the changes we are implementing for the future benefit of everyone. I feel proud that our family business will carry on and our legacy will continue long after I have gone.”
Succession planning is complex, it takes time, but it’s vital to protect the interests of your family as well as your farming business. It’s time to get started, with qualified advice and support, there is a positive way forward.
Succession planning checklist
Personal Considerations
- Make the decision to enact a succession plan
- Start talking to your spouse/partner/family about your wishes for the future
- Consider the professional help you may need (solicitor, financial adviser, accountant)
- Consider your current personal expenses and expected costs for the future
- Consider your retirement – the age you want to retire, your timeline, where you will live, your lifestyle needs, and how you will fund your retirement lifestyle
- What are the wishes for your family after you’ve gone?
- Separate your personal assets from farm assets
- Address financing options to support your retirement
- Consider strategies to address changing family dynamics such as births, deaths, disabilities, marriages and divorce
Business Considerations
- Make the decision to enact a succession plan
- Consider your wishes for the legacy of your business
- Outline who will need to help by acting as independent facilitators (lender, solicitor, financial adviser)
- Consider the transfer of ownership of your business – family members, timeframes and ongoing involvement from the older generation
- Undertake a review of your business and outline business expenses and expected expenses in the future
- Outline drawings, loans and off-farm income needs for those involved in the business
- Create a framework for ongoing discussions and feedback through a set of meetings:
- Outline business assets (and assets which sit outside of the business), current structures and available skills sets/human resources for the future
- Identify your farm assets, where they sit and where they will go
- Engage all parties and outline consequences of involvement/non-involvement
- Consider if family members have special needs or require representation
- Consider how unpaid contributions to the business will be recognised
- Identify a workable timeline or trigger points for transfer of business ownership
- Consider a contingency plan if all parties are not in agreeance and risk management strategies or dispute resolution strategies
- Outline what is non-negotiable and areas for compromise
- Identify if current structures are appropriate for future transfer of ownership needs (consider tax implications and longer term effects for the next generation)
- Consider family legacy and your ideas for the business brand after transfer of ownership
- Address any financing options required as part of transfer of ownership
- Protecting your plans and future through personal insurances.
I understand, there is a lot to consider. If you would like more information about starting the succession planning process, I invite you to contact me today on 08 8253 2906 or email info@financialservicessa.com.au
At Financial Services SA, we have a personal interest in helping family farming businesses implement practical solutions to help them make the most of their personal and business situation. Dibbo has been helping primary producers and family business owners in rural and remote locations for more than 30 years.
Five Steps for Succession Success Articles
- Step 1: Setting Expectations Great expectations | A successful strategy for your family and your business
- Step 2: A Structured Approach Everyone at the table | We thought we were doing the right thing…
- Step 3: Identifying Everyone’s needs and concerns Walk a mile in their shoes | Planning a seamless transition from one generation to the next
- Step 4: Strategise What’s fair is not always equal | Horses for courses
- Step 5: Implementation Head in the sand about the future of your farming business?
Working in collaboration for a number of years, Financial Services SA and Kelly Kelly Legal offer insight and expertise in rural and family farming business succession planning. Accustomed to opening up meaningful discussions, we cut through technical-talk in favour of straight-talk, to offer integrated solutions that consider the often-complex nature of succession plans to incorporate business transition arrangements, wills and estate planning and retirement and superannuation planning.
The Kelly Kelly Legal team provide advice and representation across a broad range of legal areas including Deceased Estates, Employment Law, Family Law, Farming Leases, Liquor Licensing, Personal Injury Claims, Wills & Succession Planning, Commercial & Business Law, Conveyancing & Property Law and Criminal Law.
Succession Planning Case Studies: The McIntyre Family | The Jackson Family
This advice is provided by Phillip Dibben under Financial Services SA rural business consulting services.
Phillip Dibben is an MFAA Approved Credit Adviser, including SMSF lending, and is an Authorised Credit Representative with Riverland Lending Services Pty Ltd, ABN 37 1415 814 080 ACL 391835, and is licensed to provide advice in all consumer and business loans including equipment finance. All loans are subject to lending and approval criteria.
Phillip Dibben is also a financial adviser at Active Financial Management. Active Financial Management and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 trading as Fortnum Financial Advisers.
This information does not consider your personal circumstances (including taxation) and is of a general nature only. You should not act on the information provided without first obtaining advice specific to your circumstances.