Succession planning for farming families has never been more important. In 2019 it was estimated that 92% of farming businesses have no succession plans in place, leaving many farms at risk.

Succession used to take place as a matter of course with farms handed down from (usually) father to son. But what happened in times past is often not implemented today because of the difficulties of balancing equality between those children who are involved in the day-to-day farming business and those who either have no interest in the farm or feel that farming is not economically viable for them. With many farms being asset-rich and cash poor, this is a huge conundrum.

Proper estate and succession planning can make all the difference to family unity, particularly as second marriages - resulting in blended families - are more and more common. 

Second spouses

In particular, in relation to farming, consideration may need to be given to the occupation of a second husband/wife/civil partner in their home whilst ensuring that the long-term viability and protection of the farm are secure.  It is also important to consider whether funds may be needed to support that second family during their lifetime whether it be raised from the farming business or income that is produced outside of the farm. 

There are many ways to ensure that a second family has protection in their home whilst keeping the ownership secure for the next generation, but each case will depend on family circumstances and, more importantly, family wishes.

In any event, the most important thing is to discuss your wishes and intentions with all members of the family so that there are no surprises. If the intention is to provide equality between every member of the next generation then consideration should be given as to how the farm will actually run on a day-to-day basis, who inherits which assets, and how your plans might interact with the needs of the business and those of your family. Failure to address these critical planning aspects can cause irreparable rifts.

Wills and blended families

It is further imperative to ensure that Wills are in place to ensure that there is flexibility to meet your wishes and your family’s circumstances at the date of your death not today together with taking into account the up-to-date taxation legislation.  All these facts will significantly impact your loved ones as well as the business. Of equal importance is that you choose the right executors and/or trustees. Being an executor or trustee is a responsible and sometimes difficult role, which requires impartiality, particularly where there are conflicting interests from partners or children from previous and current relationships.

Family dynamics can be powerful but can also be managed with careful and sensitive discussions. It is important that open and frank conversations are had during your lifetime. Sometimes this is easier to achieve with an impartial facilitator, but however, you choose to address these important issues, planning at this stage will ensure that the long-term viability of the farm is protected and that your wishes will be followed.