Farmers are hardworking individuals. They spent years planting crops, feeding livestock, and handling other important tasks every single year. Most farmers will pass down their property to their family members. Some of them would actually delay the process and paperwork required until it is too late. Having a succession plan is important to make sure that your treasured land, livestock, and equipment are offered to the right beneficiaries. The following guide from a tax law firm in Perth will help you understand a little bit about farm succession planning. Here’s what you need to know:
How to start the process:
Your farm succession planning begins with understanding your requirements. Think about how your future generations should benefit from your succession plan. Take into account your needs in retirement as well. You should tell your heirs to take responsibility in managing the land and farming operations. If you would like to donate certain assets to charity, that is possible too.
Create your farm succession plan:
When creating your farm succession plan, determine who should take care of your farm or ranch in the future. When creating a succession plan, remember the following tips:
– You can have single or multiple heirs.
– If you have multiple heirs interested in farming, see if they can collaborate and work well together.
– Analyse if increasing the number of heirs will impact your succession plan.
If you are passing on the farm to a single heir:
According to a tax lawyer in Perth, farm succession planning is usually easier when you have a single heir. You don’t have to encounter bickering family members, so there’s little to no risk in this regard. Make sure you are providing the right guidance to your heir on taking care or managing the property. Your heir must be someone who could wholeheartedly commit to it. Besides creating a succession plan, you should make arrangements to make a will too.
If you are passing on the farm to multiple heirs:
The transition process can be relatively complex if there are multiple heirs involved. The more heirs you add to your plan, the greater the complexity. Communication with your heirs is important, in order to understand what their expectations are. Not everyone would want to take over your business. Therefore, create a succession plan that not just satisfies the desires of each heir, but also fulfils your goals.
Make the Transition Slowly:
Now that you have created a succession plan with the help of a taxation lawyer in Perth, make sure the process is implemented slowly. Taking care of your farm is a huge responsibility, so you don’t want to rush things up and hire a CEO overnight. Give enough time for the heir(s) to understand your business and get comfortable with their new responsibility. As they gain experience over time (which could be months or years), make them partners of your business at an ideal time.
Experts recommended starting farm succession planning as early as possible. That way, things would be a lot smoother in the future. Get in touch with a tax law firm in Perth if you have any questions.
The author is a skilled tax lawyer in Perth with over 4 years’ experience. In this article, he gives an overview of farm succession planning for readers. To know more, visit https://www.munrodoig.com.au/