Frequently Asked Questions.

“What does it cost?”

 

Rural Succession Services has its one day Facilitated Meeting Process registered with Farmbis in South Australia (65% subsidy) and Victoria (50% Subsidy).

After the subsidy the cost to the family would be:

South Australia - $600 to $900
Victoria - $850 to $1200

This cost includes a facilitator, minute taker (usually accountant) and venue hire for one day, a documented set of minutes and agreements for each family member.

Travel and Accommodation for the family may also be subject to Farmbis funding subject to application.

“Where is Rural Succession Services based?”

Rural Succession Services has bases in Melbourne and Mt Gambier which ensures that services can be provided to a wide area and interstate travel can be easily undertaken.

“What is the process followed when people approach you with a succession planning issue?”
The same process is followed when facilitating all family meetings. A neutral venue is suggested and all family members and partners are asked to attend for the entire day. The family accountant is requested to be present to answer specific financial questions regarding the farm. Minutes of the meeting and agreements are always provided to all family members.

“What are the most common issues that are dealt with at the first Succession Planning Meeting?”

Quite often the first issue to deal with is are there any children who wish to carry on the family farm after the retirement of the parents. Once this is established the following issues often come to the fore. When will the parents retire? How and when will the assets be distributed between the children? How and when is the transfer of management going to take place? What tax issues have to be considered during transferring and how are financial arrangements going to be protected going forward?”

“How do we protect the family farm from the circumstances of relationship breakdown and divorce?”

Binding Financial Agreements are increasingly being used to assist in the division of assets should a relationship breakdown. The Family Law Act is now recognising that Binding Financial Agreements will largely determine how assets will be distributed in such case.

“How do we compensate one child for returning to the farm and working for minimal wages prior to taking over the farm.  Whilst at the same time being fair to all children?”

There are several ways to reward returning children. They can take a share in the business, be gifted livestock or plant, or take land to the value of forgone wages. One way to ascertain the market value of such wages is to base it on the same methodology as Centrelink who use a economically calculated procedure to determine the value of land being gifted under the “Forgone Wages” gifting policy.

“When there are some family members that are reluctant to attend a family meeting, what some of the ways to encourage them to attend?”

 

The younger generation in the family can maybe talk to the younger generation in the accounting firm to encourage the older generation in the accounting firm to talk to the older generation in the family.

Coming up with a common shared vision for the future can bring people together to discuss how to achieve it.

Having an advisor suggest the meeting.

Telling the reluctant generation that if they do not come to the table there will be a cost. (Lost income, loss of estate in taxes, would you rather the government inherit your estate or your children and grandchildren?)

Spend time with the encouraging generation to ensure that they are not the ones causing the problem, being too pushy or inconsiderate of the needs of the retiring generation. The last resort is to leave the reluctant generation out of a meeting and tell them the consequences.

Try new communication vehicles to get them talking; Myers Briggs test

Start with a chat about OH&S, EU Accreditation, fill out some paperwork, bring it around to other issues

Find a trigger:

- The government will get part of your assets.

- Your Grandchildren will not get the education they deserve.

- You will lose your legacy
- Is this what your parents wanted when they left the farm to you?