Planning ahead smooths out transition

Safe Farms WA executive officer Maree Gooch put questions to a panel including Pacer Legal solicitor Melissa Adams, Rabobank succession planning facilitator Rosemary Bartle, Dalwallinu farmer Wendy Sawyer and Brookton farmer Ellen Walker.

Ms Gooch said succession could be a bit of a taboo subject and a bit scary for some families.

“It’s not easy,” Ms Gooch said.

“It’s about communication and it’s about really focusing on the outcome that you want.”

Ms Gooch asked solicitor Ms Adams when a lawyer should be involved in the farm’s succession plan.

“It’s a good idea to let your solicitor know what’s happening if there are material changes,” Ms Adams said.

“So when you have children returning to the farm it’s probably time to let your lawyer know and ask what sort of things you need to put into place to make sure that everyone is on the same page for the future.”

Ms Adams said communication was the key to a successful succession plan.

Facilitator Ms Bartle said the most important aspect of a succession plan was communication.

“It’s communication about the goals, aspirations, expectations, issues and concerns of all stakeholders,” Ms Bartle said.

“To achieve that you need to make sure you have very clear communication early on, so that you can, in a very safe environment, sit down with your family

“Be able to talk about what it is that every body wants and what does everybody need? What are people expecting? What are the issues that we have to deal with and what are the concerns we have about our family and our business?”

Ms Bartle said it was very tempting to avoid succession planning and not talk about it until there was a crisis, but when there was a crisis it could be too late to properly divide equally.

“I often say to people well what is your legacy? Is your legacy the fight or is the legacy the farm?” she said.

Ms Bartle said starting early with succession was extremely important and it was just as important as communication.

“The earlier we start with succession planning and thinking about how we are going to transition that farm from one generation to the next, the more opportunities we have to accommodate everybody in that family,” she said.

“Most importantly it gives people the chance to save and develop family relationships.

“Business is important, but at the end of the day the most important factor in this is our family.”

Ms Bartle said there was nothing sadder than families leaving succession until a crisis point which often ended up with siblings not talking to each other and grandparents and grandchildren not having contact with each other.

“It’s all because we are fighting about the assets,” she said.

Ms Bartle’s advice was the earlier families started the process, the more options they had and the less likelihood of conflict.

“All stakeholders must be included in the process,” she said.

“And yes that includes the daughter-in-law and the off-farm children.”

Ms Gooch asked Dalwallinu farmer Ms Sawyer if she knew what she wanted when working on their succession plan.

“Did your plan and cover everything or has it been more dynamic and you have made some changes along the way?” Ms Gooch asked.

Ms Sawyer is part of a long-established family farming business with her husband Rob and they have three sons.

Two of the sons have moved off farm and one, Nathan, remains heavily involved with the farm.

“Our partnership is a mixed partnership,” Ms Sawyer said.

“We have already been through one farm split, with Rob’s brothers, which was done in an extreme hurry with no prior discussion having taken place at all.”

Now there is only Rob and his brother farming together and their sons.

Ms Sawyer said the next step for them was the split between the two families and having been caught out the first time, they have planned ahead.

“While everyone has worked out what they want in regards to the land and machinery, it’s constantly changing because the business is constantly changing,” she said.

“Any new infrastructure we will take into consideration which name it goes under or what block it goes on to make sure everything then is hopefully as even as could possibly be.”

When Ms Sawyer and her husband started proceedings with their sons they sat them down and asked them their expectations.

“We wanted to know what they wanted from the farm,” she said.

“My youngest son at the time was 16 and said ‘what the hell am I doing here’ and he couldn’t understand why we had to discuss these things.”

Mr Sawyer said their family split would be quite straight forward because the two off-farm boys have their education and they consider that to be their asset because it’s enabling them to create their own wealth.

“There is still considerations for them down the track should anything happen or we do split,” she said.

Brookton farmer Ms Walker said her family also considered those off-farm in the succession plan.

She said her family considered the farm to be an asset that could be used over their working life to set up for retirement.

“But there has to be something to pass on to the next generation of equal or better value,” Ms Walker said.

“I’m running the farm but my sister, even though she isn’t involved in the day-to-day, we have quite a few off-farm assets she is consulted about what we should do with those.”

Ms Walker said they operated as a company and the shares of the company were held by family trusts which made it quite easy to pass it on to the next generation and to distribute funds to family members that aren’t necessarily on the farm.

Ms Walker’s father was dumped with the farm when he was young.

“My grandfather got quite ill quite quickly and dad went from being tyre kicker to boss overnight,” Ms Walker said.

“He always had a fear of not passing that on to us, he always planned to retire early and he put in place actions so that he could retire when he saw fit.”

Initially having two daughters, Ms Walker’s father assumed the farm would get leased and he would keep it as an asset but that it would be unlikely it would be family farmed.

He hadn’t realised Ms Walker was keen on farming.

She completed a double degree in agricultural science and commerce in 2005.

Travelling after university, she returned home to the family farm at the end of 2006 and has been there ever since.

“Communication is absolutely key, in my case if I hadn’t communicated that I wanted to be involved in the farm, dad would have looked at other options,” she said.