Turning your mind early to this process will mean your decisions can be considered and based on expert legal and accounting advice, rather than in reaction to a stressful life or financial event.
Some questions your advisors will suggest you consider are:
- Will the farm continue to support the older generation following the transfer of the assets to the younger? What business structure is best used to achieve a distribution of income? Should life tenancies be considered, or will the older generation live off-farm following the transfer?
- If the farm is not to continue to support, will the older generation be eligible for the age pension and Government supported aged care if they gift assets to the younger generation?
- How will the non-farming children be provided for? Do you need to redraft your Will to avoid a Family Provisions claim following your death? Are there any unpaid wages which need to be taken into account when assessing what is 'fair' for on and off-farm children?
- Are there tax implications for the transfer? If the transfer meets the test of an 'Intergenerational Transfer', the transaction will be exempt from stamp duty. Specialist accounting advice should be taken as to capital gains tax and tax implications of current and future business structures.
- Will debts be restructured or paid out on the transfer of the farm assets? Do the members of the younger generation need to consider binding financial agreements with their life partners to protect the family farm into the future?
Our firm has the expertise to cover the property, commercial, estate planning, and family law aspects which come with succession planning for your family and your farm. They can be big discussions and decisions, and an emotive time for all the family - we're here to help, with offices in Oberon, Bathurst and Lithgow on 02 6331 2911.
David Killen | Solicitor & Lauren O'Brien | Senior Paralegal