Succession Planning - RIP

Maitland Mercury, December 2003

By Kellie Tranter

Before launching into the importance of succession planning, it is necessary to refer to some important statistics (source: Monash University):

• Over the next 30 years people older than 65 years of age will represent 20% of the population.
• Sadly, people suffering with dementia will increase by 359% since 1989 levels.
• 83% of all businesses in Australia are family businesses with 56% facing generation change over the next ten years.
• Farming businesses represents approximately 14% of family business.
• The turnover generated by family farm business in Australia was $28 billion in 1999/2000.
• The average age of farmers is 58 years.
• A significant proportion of farm assets and management control will be transferred over the next ten years.
• Nine out of ten farm families have no written plans for the future.
• Three out of four families have not sought advice.
• 30% of farm families will sell.
• Only 30% of farm families will succeed from 1st to 2nd generation and only 15% from 2nd to 3rd.
• Nine out of ten farm families need professional guidance to work through the complex issues of succession.

The law of succession is concerned with the legal consequences flowing from the death of the deceased person’s property, both real (land and interests in land) and personal. The succession planning process involves the review of a person’s will, business structure, land ownership, and risk management.

To conduct this process efficiently and comprehensively, it is important to ensure the involvement of the family and to seek professional assistance from an accountant, agriculture consultants, a financial planner and a solicitor (a coordinated approach is always desirable).