Understanding the Complexity of Farm Succession
Farm succession planning is a critical yet complex process that ensures the longevity and financial viability of your family farm across generations. Unlike typical estate planning for suburban families, farm succession involves multiple layers of consideration, especially when balancing the interests and needs of both on-farm and off-farm children.
Our experience in dealing with farming families highlights the importance of thorough planning and open communication. Here at Mildwaters Byrth Lawyers & Conveyancers, we understand the intricacies involved in farm succession, thanks to our principals, Kylie Mildwaters and Joel Byrth, both of whom were raised on farms and have deep roots in the farming community.
Key Considerations in Farm Succession Planning
Fair but Not Equal Distribution
- On-Farm vs. Off-Farm Children: One of the main challenges in farm succession is the distribution of assets between children who are involved in farming and those who are not. On-farm children often receive farming assets, while off-farm children receive other assets to balance the distribution fairly but not equally. This approach ensures the farm’s ongoing viability while addressing the financial needs of all children.
- Balancing Interests: It’s crucial to recognise that on-farm and off-farm children have different needs and expectations. On-farm children are provided with a means to earn an income, while off-farm children might receive cash or investments. This requires careful planning to ensure fairness and avoid future conflicts.
Legal Structures and Asset Protection
- Trusts and Ownership Structures: Transferring farming land into a discretionary family trust can prevent the land from becoming part of a deceased estate, protecting it from claims by off-farm children or the impact of marital breakdowns. This structure also offers benefits like ease of control transfer, no stamp duty or capital gains tax, and flexibility in income distribution.
- Formal Agreements: Verbal agreements or “handshake agreements” can lead to disputes if not formalised. It’s advisable to document these agreements legally to protect all parties involved and to prevent potential court battles.
Ensuring Financial Security for All Generations
- Younger Generation: For the younger generation involved in farming, financial security is a paramount concern. Options like life insurance, investment properties, and superannuation can provide financial stability. These measures ensure that if something happens to a young farmer, their family is not left without support.
- Older Generation: The older generation needs to have a secure financial future as they transition control of the farm. This can be achieved through guaranteed income for life, lump sum payments, or the purchase of a home off the farm, secured by a mortgage over the farming lands.
Regularly Updating Wills
- Importance of Current Wills: A will that reflects the current family and financial situation is crucial. Outdated wills can lead to unintended consequences, such as the forced sale of a farm to satisfy equal distribution among heirs. Regular updates ensure that the will aligns with the family’s evolving circumstances and the farm’s needs.
Common Issues and Solutions
Verbal Promises and Constructive Trusts
- Legal Implications: If a child relies on verbal promises about inheriting farm assets and suffers detriment when those promises are not fulfilled, they can establish a constructive trust or equitable interest in the land. This often leads to court disputes, which can be avoided with formal agreements.
Conflict Resolution
- Mediation and Legal Advice: Early and open communication is essential to avoid conflicts. Family meetings facilitated by legal advisors can help address concerns and set clear expectations. In cases of significant conflict, independent legal advice for all parties ensures fair representation and resolution.
Boom and Bust Cycles
- Economic Considerations: Farming is inherently cyclical, with periods of boom and bust. Succession plans should account for these fluctuations to protect both on-farm and off-farm children. This might involve setting aside resources during boom periods to cushion the impact of downturns.
Getting Started with Farm Succession Planning
Starting the conversation about farm succession can be challenging but is necessary for the long-term success of the farm and the harmony of the family. Here are steps to begin:
- Initiate the Discussion: Gather the family to discuss the future of the farm, the roles of each member, and their expectations.
- Seek Professional Advice: Engage with lawyers who specialise in farm succession to draft a comprehensive plan that addresses all legal, financial, and emotional aspects.
- Formalise Agreements: Ensure all agreements are documented and legally binding to prevent future disputes.
At Mildwaters Byrth Lawyers & Conveyancers, we are committed to helping farming families navigate the complexities of succession planning. Our approach combines legal expertise with a deep understanding of the farming community, ensuring your farm remains a thriving family asset for generations to come.
Contact us today to start planning for your farm’s future.

Let's Talk Today!
Contact us via email, or our online form and we will get in touch with you.