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Succession planning – taking control
One of the most demanding and difficult tasks undertaken by any family farming business is planning the succession of management and the passing of assets on to the next generation.
The process can be especially complicated because of the close relationships and emotions involved. Most people are not comfortable discussing topics such as ageing, death, and their financial affairs, particularly if and to the extent it includes “letting go. Many families have spent their working lives building up their businesses. Naturally they want the business to thrive after they have retired or died especially if the farm is to remain in the family for future generations. Succession planning helps you protect your assets and helps you take control of how you pass on the business when the time comes. Setting aside time for long-term planning can be a low priority. But, it shouldnt be- planning today can make the world of difference to how the business operates in the months and years to come. Seek good advice and seek it early. To ensure a smooth succession it is vital to start planning several years before your retirement date or death (a date no-one can anticipate!) Delay planning and your family and your business may all suffer as a result. If you and your family are prepared to put aside time now to prepare for the future the rewards can be very significant and you can make sure that the transition happens the way that you want it to. A succession plan must align personal, family and financial objectives so as to:
- Take forward and evolve the business, probably retaining the strong family identity
- Safeguard a lifetime (and often generations) of hard work
- Prepare the next generation to manage effectively without conflict
- Pass control to the right people
- Enhance the prospects of harnessing and guaranteeing the next generations enthusiasm, hard work, loyalty and commitment
- Smooth the transition of ownership and management
- Provide a method of running/managing the business after the retirement of current owners
- Prepare the way financially and emotionally for those staying in the business and for those retiring from the business
- Mitigate tax
- Ensure that everyones objectives are well known to the professional advisors.
The benefits of a succession plan?
- Peace of mind
- Emotional and financial security
- A customized solution
- Savings in terms of stress, time and tax and probably professional fees
- Catering for the unpredictabilities of life eg. death/disability
At Latimer Hinks we understand that succession planning can be emotional, challenging and full of potential difficulties but we work with families (and their other advisers) to achieve workable solutions and a smooth transition. Click for acopy of our Fact Sheet “Succeeding at Succession Anne Elliott, is an agricultural expert and partner at Latimer Hinks Solicitors. Anne is from a farming background and her main areas of work include wills, trusts, inheritance tax and succession planning. Anne is referred to as “Top Ranked in the Agricultural Section of Chambers UK a guide to the legal profession. “Anne Elliott has been raising the profile of succession planning within the farming community. Described as “forthright and knowledgeable and one of the “key experts in the North East, she is also listed in the Legal 500.
