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TRADITIONALLY, farms were often passed down to the eldest son, but this practice has been shifting, with more recognition of the contributions of all children, regardless of gender or involvement in the farm.
Many young people have left rural areas due to economic challenges and the lure of diverse career opportunities, and off-farm work is common, with family members often seeking additional income to support the farm financially.
The expectation for a “fair share” of family assets has also increased among off-farm children, as the value of farming land has skyrocketed, necessitating even more careful consideration to asset distribution plans.
Mildwaters Byrth Lawyers & Conveyancers knows dividing farm assets is not straightforward.
“The main challenge lies in balancing the need to maintain a viable farming operation with the desire to treat all children as equitably as possible,” lawyer and principal Joel Byrth said.
“Off-farm children can be compensated with off-farm assets or financial arrangements, ensuring they receive a share of the inheritance.
“This approach aims to balance the financial needs of all children, while maintaining the integrity of the farm.
“Dividing the farm equally among children could undermine the commercial viability of the enterprise, especially for smaller farms.”
Mr Byrth said some of his advice included assessing the future needs of each child as well as the financial security of retiring parents, customising a succession plan that addresses the unique needs and contributions of each family member, and ensuring clear legal provisions form part of that plan to prevent disputes.
“This can include buyout options, life insurance policies and agreements on how to handle potential conflicts,” he said.
“Alternative dispute resolution, such as mediation, can help resolve disputes and ensure that all parties feel their concerns have been addressed.”
To start your succession planning journey, and avoid bumps along the way, contact the Mildwaters Byrth Lawyers & Conveyancers Kadina office on 8821 2199 or Minlaton office on 0448 725 447; for more information go online to mildwatersbyrth.com.au.