Farm succession can potentially be an emotive issue but that doesn't mean families should be put off having a conversation about it – sooner rather than later.
Succession planning is when farm assets, knowledge and skills are transferred to the next generation.
It's a significant issue for around half of all New Zealand farmers and often involves much more than just handing over the ownership and control of the farming business.
Tavendale and Partners are legal specialists in agribusiness and succession planning.
Partners Mark Tavendale and Alana Crampton both agreed that clear communication, as soon as possible, was vital when it came to the future of the family farm.
"You can never have this conversation too early," Tavendale told The Country's Jamie Mackay.
"I think it's never too early to start communicating and talking about these things within the family when you start making your farming decisions."
It was also important that all members of the family were part of this conversation, including those children who were non-farming - to avoid problems, Crampton said.
"If perhaps, parents and a farming child are going on their merry way as to what their succession plan looks like, if there are other non-farming children that don't have so much of a say or knowledge in what's going on – sometimes the lack of knowledge can breed discontent between siblings and family members."
It was good for all family members to have an understanding of the business and its plan for the future, Crampton said.
"It's helpful for everyone to know exactly what that business consists of (assets and liabilities) and what it is able to be achieved."
"The biggest tragedy sometimes you see in a family is when someone has gone ahead on expectations - you're a young farmer and you think this is the way it's going to pan out for you, and you find out when you're 40 it's not."
Therefore, it was important to include everyone when thinking about the future of the business and to have a conversation about it now, Tavendale said.
Mark Tavendale. Photo / Supplied
"It's easy to come home [to the family farm] but what are you coming home to? What do your brothers and sisters and ultimately your parents think that's going to look like in terms of the ownership that you're working towards?"
Disenfranchised family members were able to take legal action, more so than previously, and with rising farm prices, this was happening more often, Tavendale said.
"Unfortunately things are becoming more litigious and I think now with capital values being higher there's more at stake.
"People are more questioning of what they're entitled to, so people are a lot more active in terms of putting up their hands and saying 'I want'".
Crampton agreed that rising capital values had put pressure on succession planning.
"There are a lot more dollar signs involved than there were 10, 20 years ago, [which] obviously makes for a very tricky situation for some families."
Alana Crampton. Photo / Supplied
Purchasing off-farm investments as soon as possible was one way to aid the succession planning process, especially for non-farming children, Crampton said.
"If there's farming children on-farm doing what they need to do and the progression plan is for them to take over ownership of plant and stock, and then the land, having the off-farm assets provides…potential...for the non-farming children down the track for their inheritance."
Finally, while it was easy to focus on the children in succession planning - it was important not to forget Mum and Dad, Tavendale said.
"With the increased capital values, also comes increased debt levels in the Agri sector, to enable things to happen on farms and to get ahead with growth.
"You've got to remember – you've got to look after the parents first."
"They've often worked really hard and they deserve a retirement without worrying about whether their cheque's arriving next week or next month, depending on what's happening on-farm."
