Planning your path to succession: Getting everyone's point of view

There’s a lot to consider and it can seem overwhelming at first. But if you think of succession planning as a process instead of an action, it makes it much less daunting.

You know what your own concerns are, but how about everybody else? Let’s look through some of the possible points of view – it can be helpful to get an understanding of how others might be feeling, before you all get around the table.

Depending on your situation, here are some points to be considered:

Are you the outgoing generation?

Having worked on the farm all your life, you’ll need to prioritise your own financial security before transferring assets. You’ll need to think about the following:

Your timeframe to exit the business;
What level, if any, you wish to continue to be involved on the farm;
Will you need or want to continue to draw income from the business;
What will happen to the farm dwelling house;
Will you need to avail of the Fair Deal Nursing Home Scheme;
What are your wishes for your other children.

Are you the incoming generation?

If you’re the incoming generation, you’ll need to think fully about your own situation and your life goals and aspirations. If you have a partner or spouse, their views are really important also. You’ll need to consider the following:

Can the farm afford to support your desired lifestyle (and possibly the outgoing generation’s)?
What’s your expectation on working hours, holidays, time off etc.;
There may be additional benefits to your wages that should be examined from a reward point of view e.g. use of jeep/car, fuel, electricity, health cover etc.;
Can the farm meet your parents’ wishes to support siblings if applicable.

What if there’s no successor?

If there’s no willing successor in the immediate family, there are other options to consider:

Partnership;
Share Farming;
Transfer to niece/nephew;
Leasing;
Possible sale (part or full disposal).

Some of the above solutions may be an option where the landowner wants to take a step back from the day-to-day management of the business or in situations where an interim solution is needed until a successor becomes old enough to take over the farm.

Succession Case Study:

The benefits of getting it all out in the open

For the purpose of this case study, meet Elaine Vance from Donegal, who milks 215 cows, owns 200ac of family farmland and rents 150 more.

Elaine farms with her Dad Geoffrey and her husband Robert and she has three small children. Her family relationships have benefitted from strong communication.

The natural successor

Elaine, who has a PhD from Queens University in Dairy Production Systems, always showed an interest in the farm, making her the natural successor. Despite this, Elaine feels strongly that you can’t underestimate the importance of everyone’s needs being discussed openly.

Even if only one person is genuinely interested in the farm, it’s still the family home which makes it an emotional issue.

“When we first spoke to ifac, it was honed into us to talk about what everybody’s needs are from the family farm.

“That was something we did, so that everybody knew what everybody’s wishes were, and nobody was in the dark about anything,” she said.

Discussing every last detail

Good communication is crucial, and Elaine and her family talked through everything – the farmhouse, how her parents would be cared for when they were elderly, what her parents needed as regards income and what Elaine’s family needed as an income.

They also talked about what her parents wanted for her siblings and what her siblings wanted for themselves.

Don’t assume you have loads of time

In Elaine’s experience, succession can take longer than you expect, even if you’re organised.

“It took time; this was down to the fact that we had a very complicated structure that took time to work through and come up with a plan that was best for everybody,” she said.

The more time you give your succession process, the better the outcome.