FOR FARMING FAMILIES

Farm succession planning: start with what each person wants

Before structures, numbers or options, there's one thing to get clear. What does each person in the family actually want?

Not what they think they should want. What they actually want.

That's where good farm succession planning starts.

How it works

Give everyone the same questions. Each person answers on their own, then you sit down together and share.

Take it one step at a time. Some parts need the whole family. Some are best done individually first, then compared. Don't rush.

For the retiring farmer

• Picture your life five years out. Where will you be living, and what will fill your days?
• Do you want to stay on the farm? In what capacity: full involvement, part time, advisory, just living there, or completely away?
• How involved do you want to be in the farming decisions? And in the physical work?
• What does legacy mean to you? If you could guarantee one thing about this farm in 20 years, what would it be?
• What outcome would you consider a failure?
• What are you most afraid of in this process?
• What would make you feel at peace?
• Which one thing will you not compromise on?

For your partner

• What does your ideal retirement look like? It might be very different from the farmer's answer.
• How do you feel about the farm's future? Excited, anxious, indifferent, conflicted?
• What do you need from this process, financially and emotionally?
• Where do you and your partner agree? Where do you differ?

For each child or family member

• Do you want to be involved in the farm? Farm it full time, be involved in governance, receive income, or have nothing to do with it?
• If yes, what does that look like in practice? Be specific.
• Do you have the skills and the willingness to run the operation? Be truthful with yourself.
• What do you need financially? Cash now, ongoing income, an asset to hold, or nothing?
• What would a fair outcome look like for you and your siblings?
• What are you most afraid of?
• What have you been assuming about what the others want? Write it down, then check.

For the incoming farmer, if you know who it is

• What's your farming experience and capability?
• What capital can you bring? Cash, livestock, machinery, or nothing at all. That's OK.
• What income do you need in your first year?
• What does a pathway to ownership look like for you?
• What are you most worried about?
• What would make you commit completely?

After you share

• Where does the family align?
• Where do you differ?
• Were there any surprises?
• Which assumptions turned out to be wrong?
• What needs more discussion before you move forward?

The gap between what people assumed and what they actually said is where the real work happens.

Where it leads: a plan on one page

These answers are the start of the planning. The rest comes next: the numbers, the options, tax, legal, insurance and housing.

Once all of that is worked through, you pull everything together into a one page brief to take to your accountant, your lawyer and your other advisers. It isn't the final legal plan. It's the brief that informs it. It covers:

• Farm: location, size, type, estimated value.
• Our vision: two or three sentences on what we want for the farm and for retirement.
• Family situation: who wants what, where there's agreement, where there's tension.
• Financial position: net assets, debt, income needs, lump sum needs.
• Preferred options: which pathways, and why.
• Incoming farmer: known or unknown, their situation, or what we're looking for.
• Timeline: start date, transition period, completion target.
• Tax considerations: the key issues your accountant has flagged.
• Legal actions needed: wills updated, agreements to draft, structures to set up.
• Insurance gaps: what needs reviewing or adding.
• Housing plan: who lives where, during and after.
• Key risks: the top three, and how you'd address them.
• What won't be compromised: the things nobody will trade away.
• Professional team: accountant, lawyer, financial adviser, and anyone else you need.
• Next step: the one thing to do first.

For today, start with the questions.

The full guide, The Cultivate Farms Succession Guide, is free at cultivatefarms.com/resources.

You can build your own plan at cultivatefarms.com/plan.