Having a plan for farm succession in place – whatever it may be – is always a good thing.
Increasingly, farm transfers are taking place during the owner’s lifetime, allowing all parties to manage the process. Every family has a different set of circumstances, but it is always better to have a plan in place.
The worst case scenario is where the farm transfer is unplanned as a result of illness or the death of the owner, leading to tax and legal complications.
Many farmers say they will never retire, however you do not have to be retired to have a succession plan in place and there are many decent tax reliefs and benefits to encourage you to prepare a plan in good time.
To help you prepare Teagasc is hosting two webinars on October 6 and October 13, at 7.30p.m as a follow-on to the webinar which was held last November.
You can register for this year’s event or view last year’s webinar here.
At last year’s webinar, we focused on three areas:
- Key questions you need to answer during the decision making process when planning succession;
- Taxation: there are three taxes that could prove extremely costly if a succession is poorly planned;
- Farming in partnerships: these are an important model that can form part of a succession plan, especially if parents are young and there is a short generation gap between them and their children.
This year, we will focus on different areas and will give you more information to help you sort out issues of concern.
On the first night, you will hear from Clare O’Keeffe from Succession Ireland who will speak about farm mediation and having difficult conversations at home around farm succession.
Also, that night, Teagasc solicitor Emma Fogarty will be available to advise on how to go about making a will.
Questions will be invited on the night or you can send in your question now by emailing [email protected]. Personal questions can not be answered on the public webinar but you will receive a response by email.
On the second night, you will hear from Deborah Dwyer from Citizens Information who will discuss the Fair Deal Scheme and pensions. Kevin Connolly, acting head of Teagasc farm management will chair the sessions and invite questions from the audience.
When preparing for a farm transfer its important to PLAN
P for Prepare:
Organise your thoughts and have a discussion with the family. An open conversation with all those involved will help avoid any misunderstandings.
There is an expectation sometimes that the farm should be divided equally in monetary terms, meaning if one child is getting the farm, a cash payment must be made to other siblings however this approach could put the farm out of business.
How can a parent treat all the children fairly? Fair may not always mean equal. Is a fair share an equal share? It all depends on the situation.
Sometimes farm families need some help to have a discussion on this and it can be beneficial to bring in a specialist adviser or mediator to facilitate this discussion.
L for Legacy:
Plan how the farm is going to be passed on. From both a tax and a legal point of view, early planning is the key to reducing potential cost.
A for Action:
Make appointments with the professional experts you require to make informed decisions.
N for Now:
This is the time to get this item off the ‘to do’ list. Government policy could change significantly over the course of a few budgets and postponing a decision could make it more difficult to achieve your wishes in the future.
The first step in farm succession planning
Make a will. Many people put this task on the long finger, as they do not want to think about the inevitable and in some cases, there is total denial.
Start the conversation about making the will by emphasising the need to plan for the future, e.g: “I don’t want our family to end up fighting like what happened with Jack’s family when he passed away.”
If there is no will, then the State will decide what happens to your estate. The Succession Act of 1965 is used to decide. For some, the will becomes the plan. For others, the will becomes an insurance policy so that their wishes are carried out, if the succession plan has not been achieved because of an unforeseen death.
Family involvement in planning for succession is essential. A key aim must be to have an open conversation with the people involved so that misunderstandings are avoided.
Policy and taxation encourage early transfer, so it is important to have the conversation early to avail of all the incentives, some of which are complex, and may come with specific conditions – however, in most cases, the conditions are easily met.
A new common agricultural policy (CAP) will commence in 2023, with a strong emphasis on generational renewal, so now is a good time to make a plan and get the benefit of the extra payment incentives that will become available.
Register
Don’t miss out on the opportunity to learn the ins and outs of completing a successful farm transfer and the opportunity to ask the experts your questions.
Register today by clicking here.
