What are your children’s expectations and assumptions when it comes to handing over your assets?

That was the key question for many of the people that attended the succession-planning workshops jointly held by the Irish Farmers Journal and Succession Ireland recently. The aim was to get people starting the succession conversation early.

There was a wide variety of people there. Many were elderly, but there were many with young children, who wanted to start on the right foot when it came to the area.

Some sons came with their mothers, and there were also a few looking at moving into the new succession farm partnerships together.

Here is a summary of the key points raised at the conference.

1Start early

It is never too early to start talking about succession planning. In most businesses the board should put time aside to plan succession. Farming is no different.

2What are the short- term goals for your family?

What are the long term family goals? They were two key questions people had to write down. Can you write yours?

3Share the burden

Some of the couples felt that they had to bear the burden of making the right decisions for the next generation. “You should ask your children what they actually want,” said Clare O’Keeffe of Succession Ireland. “Very often there is expectation and assumptions on both sides.”

She talked about how having a family meeting is vital to clear the air. The immediate family should be involved and there should be agreement on what is discussed and what to tell other people before you start.

“You have to ask the key question of what are the needs and fears from each person. Question what do people expect, and also who will look after their parents if there is a need. It is a good starting point for a good succession plan,” said Clare.

4Not over Christmas dinner

“They will all be home for Christmas,” was what a few families said. With so many family members living around the world, some suggested Christmas as a good time. Yes it’s good when all are back, but best to talk to each one first to get their views and not surprise them over Christmas dinner.

5Fair might not mean equal – and equal might not be fair

That was a key point that Clare wanted to get across. They are your assets. You do not have to divide assets equally to be fair.

6Make a will and power of attorney

“Some people put off making a will until after they sort out their succession plan. Don’t use it as an excuse. Some leave it until it’s too late and let Charlie Haughey decide,” Clare O’Keeffe joked.

She was referring to the laws brought in by Haughey to decide how estates are distributed when there is no will. So make a will now. You can always change it when the plan is in place.

You should carry out a power of attorney at the same time, giving one – or better still two – people the ability to look after your assets in case you become incapacitated.

7Be clear in your will

Make sure you are clear, when writing a will, which assets you want to give. If you bequest money to someone, you can say that is on the condition that they invest in agricultural assets within, say, three years. If they have not, then it goes to them in cash. This makes it possible for the benefactor to get agricultural relief on the asset.

On the opposite side, you might say the person is to get €50,000 in cash or value. This was brought up by someone who wanted to give cash to one child and the farm to the other. They were worried that the cash might be gone from the Fair Deal Scheme, leaving one child with nothing.

8It is complicated, so get good advice

Many people worry about taxation and the Fair Deal Scheme. The biggest worry is capital gains tax. It might mean there is a large tax bill for the assets you have gifted. There was a lot of talk of how expensive solicitor’s fees are. Get a good one and they are not expensive was the final view, as some had stories about the damage bad advice can land you in.

9Different assets might have different strategies

Retirement relief is important. It means some assets, like land, could be transferred without tax issues, while it might be better to wait until after death to transfer properties. Inheritance and gift tax should also be taken into consideration. Agricultural relief and business relief are vital to reduce this for many.

10Who owns the assets?

Whose name is actually on assets is another consideration people should look at. For retirement relief, you have had to own the assets for 10 years. That surprised some.

11Fair deal

It’s a fine balancing act. “Ideally, you want to have as little as possible just when you go into a nursing home,” was one person’s comment. One in five people end up in a nursing home was another statistic quoted to counterbalance the concerns. There is a five-year look-back on assets transferred.

12What is the outcome you want in June 2018?

This was one of the final questions. The reason is you have to identify what you have to do not to make it happen. There is no point in starting the conversation early if you don’t follow it through. CL

If you have any farm finance queries, email Peter Young on pyoung@farmersjournal.ie.