All Things Newz
Law \ Legal

Farm succession – Wills/ Intestacy/ Estate Planning



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Passing the farm down to the next generation is ingrained in the
psyche of many NZ farmers, particularly those inter-generational
farmers.

Prior to the 2000’s, completing farm succession was a
reasonably stress free exercise. Modest land values and average
farm income, coupled with many of the farm children preferring to
seek their opportunities elsewhere in the big city made the pathway
for the succeeding farm child/children reasonably smooth.

Over the past 20 years however, significant increases in farm
values has led to farm succession becoming a great deal trickier.
The inability for the succeeding farm child to borrow any
meaningful amounts of money against the farm to pay out the parents
and siblings has resulted in many parents having to face up to the
prospect that a significant portion of the farm will need to be
gifted to the succeeding farm child while the non-farm children may
have to wait for many years before they can receive any sort of
inheritance.

The emergence of social media in this space is not making life
any easier for parents either, where non-succeeding farm children
all over the country are beginning to share their views on farm
succession and in particular their concerns that farm succession
should be equal or very fair, and not heavily in favour of the
succeeding farm child.

This inability for parents to be able to treat their children
equally in almost all situations now is causing a great deal of
anxiety for parents which in turn is causing procrastination in the
planning for farm succession. Furthermore potential relationship
property issues/risks between the succeeding farm child and their
partner/spouse can complicate the plans.

No wonder the average age of farmers continues to creep up year
on year and over 25% of farmers are now considering selling up as
their preferred option for farm succession, whilst also alleviating
their stress levels due to the ever looming farming headwinds
relating to climate change, rising farm costs and scarcity of farm
labour.

Farm succession planning in NZ is quickly becoming a very modern
concept which is changing all the time and farmers need to keep up
with the play if they wish to ensure a smooth transition within the
family. Farmers can start the process by talking to their most
trusted advisors, usually their lawyer, accountant, bank manager or
farm advisor. There are also good farm succession coaches who can
be very helpful for farming parents to get their planning
underway.

If farmers are hoping to pass the farm down to the next
generation, they are going to need to fortify themselves, take
great professional advice, plan as early as possible with their
children and keep an open dialogue going year on year. The farm
succession plan needs to be transparent for all family members and
needs to keep moving. It is never too late. This decent planning
and the setting of probable expectations amongst family members
will hopefully assist farming parents to successfully implement
farm succession while ensuring that the family continue to enjoy
themselves together at Christmas.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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