As solicitors with broad experience advising farming families we were delighted to be invited by Teagasc to attend their Transferring the Family Farm Clinic for the Limerick/Kerry region which took place today (13 October 2015) in the Devon Inn Hotel, Templeglantine.
While the range of attendees had differing personal and family circumstances, there were many common issues:
- How and when to transfer remains the big question. Many farmers are unsure as to how farms can and should be transferred, and when it should happen. This decision requires a lot of thought but it is never too early to start thinking. There are pros and cons to each farm succession option and no ‘one size fits all’ approach, so independent, specific advice is needed .
- Tax implications often drive transfers but fear should not be the decider. Budget nervousness has driven many farm transfers particularly in recent years. That nervousness seems to have settled down as the financial crisis abated and indeed today’s Budget sees some positive announcements for young farmers, with no dramatic changes. Short term fear is never a good reason for making drastic decisions – careful, long term tax planning is important but so is protecting the lifestyle and future care of the generation currently farming.
- Children don’t necessarily want to farm. The tradition of grooming one child to take over the farm no longer holds for all families and many now find that their children have all taken up other careers, with the long-term outlook for the farm being unclear. This calls for a more creative approach to farm succession and makes early planning even more important.
- Wills are important. This is true for everyone: a will ensures that your wishes are implemented, rather than the default legal rules that take no account of individual family circumstances. We are continually surprised at the number of people with significant assets, like farms, that have either never made a will or have not updated it for decades. Wills should be made early and kept under review throughout one’s life.
- It is never too early to start planning. This deserves repetition. Farmers shouldn’t allow themselves to be panicked into making decisions which are potentially live-changing. A long-term approach to farm succession which allows for some flexibility in the face of changing circumstances gives a framework to follow and significant peace of mind. Even a young farming couple whose children are in pre-school needs to think about the future and to ensure that their wills provide adequate certainty and security for their family.
Teagasc have published an excellent farm succession and inheritance guide which outlines the key issues and considerations for farm succession but also has helpful checklists and a draft farm succession plan. The guide is a useful first step for farmers in being aware of what they need to start thinking about.
PG McMahon Solicitors have been advising farmers for over 50 years on a range of legal issues relevant to the industry including farm succession, transfers, leases, windfarm developments, wills and family law.