What’s fair is not always equal
Strategise
By Phillip “Dibbo” Dibben
“Five Steps for Succession Success is a collaboration between Kelly Kelly Legal and Financial Services SA.”
“We want to be fair when planning our legacy. We have an idea of the big picture and longer-term plans for the family business, and we want to make adequate provisions for everyone, but we know that it won’t be an equal split. How do we plan ahead without offending those we love?”
There is often a difference between fair and equitable. Succession planning involves much more than estate planning and an equal split of an inheritance, it’s about considering family member needs, your legacy wishes and business needs. Our structured and practical approach to succession planning can help you achieve fair outcomes for your estate planning needs, an objective approach to remuneration, transitioning ownership of assets and overall plans for the farming business.
There are 5 key elements to consider when planning for the future:
#1: Farming business management needs – Long term plans for the business need to be incorporated into the succession plan, as well as addressing the transfer of management, responsibility, remuneration or value recognition of family members working in the business, and transfer of ownership over time.
#2: Family legacy needs – An all-encompassing plan should consider the retirement plans for the older generation, aspirations and expectations of family members, the role/needs of extended family, family members with special needs, as well as provisions for farming and non-farming children.
#3: Business structure considerations – It’s important to understand the advantages, disadvantages and tax implications for varying structures to meet the individual and sometimes changing needs of the business, as well as how the younger generation will be impacted by structural changes.
#4: Legal implications for the family and business – Establishing appropriate trusts for different assets such as land holdings and Self Managed Super Funds (SMSFs), and requirements for transferring individually owned (not jointly owned) assets, and the associated tax implications need to be considered. Individually, addressing Wills and Estate Plans are also important strategies within the overall Estate Planning process.
#5: Financial planning needs – Understanding your current financial position and outlining long-term financial goals and retirement plans not only for yourself, but for extended family members too. This may include outlining debt management plans, personal protection plans and estate planning wishes.
At Financial Services SA, we have a specialist skills in helping family farming businesses implement succession plans to 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.
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.
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.