Succession planning a vital family process, says expert

It is a fraught process that many families find difficult to navigate.

Succession planning is necessary for farmers who want to pass their land and business to their children.

Mike Stephens from Meridian Agriculture has a PhD in succession planning from the University of Melbourne.

He said that with rises in land values, 90 per cent of agricultural ventures take place on-farm.

“That challenge of being able to provide adequately for the non-farming children is made more difficult because of the price of land and also because of community expectations,” Dr Stephens said.

“There was a time when if you gave somebody a good education instead of giving them part of a farm, that would be regarded as being fair and reasonable - not so much now.”

Dr Stephens said it was vital that farmers start planning early.

“Newborns can’t do a succession plan, but planning for succession when their children are born gives them 25 to 30 years to build their assets, so succession becomes easier.

“It’s a long-term game – you’ve got to double the size of the business, in real terms, to stand still every 30 years.”

East Sassafras farmer Matthew Young has already gone through the succession process, having already taken over the daily running of his parents’ Elphin Grove farm.

“As strange as it sounds, the less family involvement you can have in the process, the better,” Mr Young said.

“Everybody has their own ideas of where they want the farm to go and how they want the future to look.”

Mr Young said the overall succession plan needed to suit all parties involved.

“And if you’re involved, you can’t do that because you always see it a little bit one-sided.

“Having an outside person to organise it all is key.”

The Young family began their succession planning more than a decade ago.

“We got our accountant involved and she organised an outside consultant,” Mr Young said.

“We pretty much sat down and went through the structure of everything.”

Despite being an only child and having already informally been told he would inherit the farm, Mr Young said the succession planning process was still difficult.

“Mum and Dad had been running the farm for 30-odd years at that point, so talking to him about retiring and giving it up was emotional.

“Having an outside consultant made life a lot easier, because they can take away a bit of the emotion.”