Tips for tackling farm succession

Start now

I’m often asked when the best time is to approach the issue of succession and the answer invariably is ‘yesterday’. Leaving it too late often results in significant financial implications, family fall outs, or both!

Many farmers really do want to ‘die farming’. Walking that line between being respectful and keeping the business moving forward, whilst also ensuring the senior generation don’t feel pushed out or irrelevant can be tricky. Always keep their pride and feelings in mind, acknowledging their achievements and many years of commitment to the business every step of the way.

Pick your moment carefully – perhaps a sunny Sunday afternoon checking the livestock might be the time to ask: ‘Where do you see me in this business in the future?’ But if you struggle to engage your family, think about involving a trusted, external professional, such as an accountant or bank manager. Ask them to facilitate a conversation, perhaps framing it as ‘business planning’ rather than ‘succession’.

Another benefit of having the conversation early is it allows family members to plan their personal finances in the long-term. For example, where the plan is for one sibling to take over the farm and buy the others out, they may need a 15- to 20-year savings plan in place to achieve this.

Think practically

Succession planning is not just about who receives what when someone dies; it includes the routine practicalities as well as the distribution of assets. Unfortunately, sudden deaths and accidents do happen and have the potential to cause significant and immediate issues for the day-to-day running of the farm. For example, does more than one person know how the farm water supply works and where the meters and stopcocks are located? Can more than one person write a cheque for the business bank account or access internet banking? Does the tenancy agreement extend to the next generation? These types of questions can be good conversation-starters for talking about the future. It’s often easier to talk about practical issues rather than financial ones and most farmers can relate to the ‘what if you are kicked by a cow?’ scenario.

Translate talk into action

It’s one thing starting the conversation but it’s another actually acting on it, so taking minutes at meetings and noting down timelines for actions are great for keeping things moving. In many of my workshops with The Prince’s Farm Resilience Programme, I come across families who are clear in their head about the future, but talking things through, they realise there are actions needing to be taken. They might need to formalise agreements in writing… or perhaps just find the stopcock!

Minutes are a useful record when recollections of what has been agreed differ between family members in subsequent years. On two occasions, I have even seen them used by executors in the event of a sudden death, where the deceased hadn’t made a will. In both cases, it was these minutes that provided evidence of the deceased’s intentions and determined how the assets were split.

And finally…

If you’ve explored every avenue and an agreement isn’t forthcoming, don’t be afraid to walk away. The emotional stress of these situations can be huge and no amount of farmland or money is worth compromising your mental wellbeing. I firmly believe in the Scottish saying: ‘what’s meant for you won't pass you by’.