How the Issue of Succession is Affecting Families in Rural Australia
Podcast – coming soon
It was once the tradition that sons would take over the family farm or station property, allowing for the retirement of their parents. Things have changed. For many, finances no longer permit the previously taken for granted plan of succession, nor do sons necessarily want to take over the family property – now they are better educated and have other choices and options. For many families this has become a source of potential conflict and distress.
Dr John Ashfield
For details of all interviewees who contributed to this project, click here
Dr John Ashfield
With the whole landscape and economics of life on the land changing, this is by no means a small issue. It can’t any longer be taken for granted that mum and dad will stay on the farm until retirement, with children taking over the running of the property and supporting them during retirement, until eventually inheriting the property on their demise. The once taken for granted succession that once occurred in farming families, is turning out to be a significant mental health issue. Few other issues so potently tap into deeply held beliefs, reservoirs of emotion, and generational differences in aspirations and expectations.
This is an issue that too often plunges families into destructive animosity. For one thing, people of the younger generation are much less prepared to stay on the farm, or invest themselves and their efforts, without a clear succession plan. The mere possibility, or waiting and trusting that succession will occur, competes poorly with the broader range of options that young people (who are often well educated) now have available to them.
Given the increasing complexity of farming, and the accompanying stress of operating in financially pressured and uncertain times, the new generation of farmers may also have much less compunction than their predecessors in opting out of farming to pursue other opportunities. An associated issue is the difficulty of single males finding suitable partners in rural communities, due to a diminishing population of available females. With fewer children remaining on or having an attachment to farm properties, there is a heightened likelihood of claims being made upon the assets of the family farm by siblings, who may wish to claim what they consider to be their rightful portion of the assets.
The importance of proper succession planning cannot be overstated. Easier said than done of course. Succession planning involves frank family discussion, and negotiations requiring sophisticated communication skills. It also requires diligent consideration of various legislation, such as the Administration and Probate Act, the Inheritance (Family Provision) Act, the De facto Relationships Act, Family Law Act, and provisions of welfare and taxation legislation – any of which may affect the rights of people who have an interest in the farm and its assets.
Consequently, effective succession planning will almost always involve drawing together financial planning, mediation, and legal expertise and support. Perhaps that all sounds a bit daunting? Well, a simple first step may be to consult a Rural Financial Counsellor. They can assist with the coordination of the whole process – including recommending and/or arranging for the involvement of other skilled financial and legal practitioners.
First Broadcast – Monday 13 May 2013
A Guide to Succession – Sustaining families and farms. Judy Wilkinson and Lyn Sykes. Grains Research and Development Corporation 2007.
A Guide to Communication for Farm Families. Judy Wilkinson and Lyn Sykes. Grains Research and Development Corporation 2011.