Succession, Retirement Planning and Aged Care image of a piggy bank with a tree growing inside depicting future planning.

How important is a farm succession plan?

Succession and retirement planning are often pushed aside as being too hard or when you are too busy running a farm. Retirement and aged care financial planning are intricate, and it is essential that you plan ahead to get the desired outcome.

Often, all the wealth is in the farm, with limited off farm assets, low superannuation and no entitlement to Age Pension.

By planning your exit early, you can maximise the value of your farm business while helping to meet future needs, without the need for a major increase in debt. It can also reduce the complexity of transitioning ownership to the next generation.

When should farm succession planning be addressed?


Farm succession planning should be addressed at least 5-10 years in advance of implementation. Most importantly, a structured approach on how the agribusiness will continue when one generation hands over to the next plays an essential part in actioning your legacy wishes.

Agribusinesses should consider the implications on the structuring of assets appropriately, with tax minimisation and risk management being at the forefront of these. At the same time, the need for and cost of residential aged care should be considered. 

Aged care is partially funded partly by the government depending on an individual's net worth, therefore careful consideration is needed for the expected cost depending on the type of care required. Structuring correctly can minimise this expected cost and any initial capital outlay required, which would likely be paid by the agribusiness.

Mapping out a retirement plan provides for the highest chance for success by:
  • being financially independent at your desired retirement age,
  • being able to pass your agribusiness on to a successor,
  • preparing for catastrophes, and
  • realising maximum value in all scenarios.
Aged Care

As outlined above, there are plenty of compelling reasons for getting organised well in advance. Aged Care has experienced a high level of demand as our population grows and we are living longer. The question you should be asking yourself is - Do you want the decision taken out of your control, and made by others?

With such high occupancy rates, it means there may be minimal places available at any one time. Therefore, you may not get the level of care you require when you require it. We recommend registering with My Aged Care early. At the point you notice a decline in health arrange for a health assessment with an Aged Care Assessment Team (ACAT).

Succession & Retirement Planning for Agribusinesses

It is never too early to plan your succession and retirement. Planning can include maximising the sale value of the farm, mentoring your successors, systematising processes, restructuring entities and preparing for life after retirement such as Aged Care.

If you do not want to leave your agribusiness and your wealth to chance, then plan to ensure security for your family, your farm and most importantly, yourself.

Written by: Bradley Barnes | Principal

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Disclaimer
The information provided here does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice.  We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.