Better three hours too soon than one minute too late

Every farming family has a different set of circumstances, but it is always better to have a plan in place. In a worst-case scenario, the farm transfer is unplanned as a result of illness or the death of the owner, leading to tax and legal complications.

Many farmers say they will never retire, but you don’t have to be retired to have a succession plan in place – and there are many decent tax reliefs and benefits to encourage preparation and planning in good time.

To help you prepare, Teagasc is hosting two webinars, on October 6th and 13th (both 7.30pm) as a follow-on to last November's webinar. You can register for this year's event or view last year's at www.teagasc.ie/farmtransfer.

The 2020 webinar focused on three areas:

• Succession: key questions you need to answer when planning succession
• Taxation: three taxes that could prove extremely costly if a succession is poorly planned
• Farming in partnerships: an important model that can form part of a succession plan, especially if parents are young and the  generation gap between them and their children is short

This year will focus on different areas and provide more information to help you sort out issues of concern.

On the first night, Clare O’Keeffe from Succession Ireland will speak about farm mediation and having difficult conversations  around  succession. Teagasc solicitor Emma Fogarty will also be available to advise on how to go about making a will. Questions will be invited ahead of time and on the night  by emailing succession@teagasc.ie. We will be unable to answer personal questions on the public webinar but you will receive a response by email in due course.

On the second night, Deborah Dwyer from Citizens Information will discuss the Fair Deal Scheme and pensions. Kevin Connolly, Acting Head of Teagasc Farm Management, will chair the sessions and invite questions from the audience.

Important to PLAN

Prepare: Organise your thoughts and have a discussion with the family. An open conversation with all those involved will help avoid misunderstandings. Sometimes there is an expectation that the farm should be divided equally in monetary terms – if one child is getting the farm, a cash payment must be made to other siblings. But this approach can put the farm out of business. How can a parent treat all the children fairly? Fair may not always mean equal. Is a fair share an equal share? It all depends on the situation. Sometimes farm families need some help to have a discussion on this and it can be beneficial to bring in a specialist adviser or mediator to facilitate this discussion.

Legacy: Plan how the farm is going to be passed on. From both a tax and a legal point of view, early planning is the key to reducing potential cost.

Action: Make appointments with the professional experts you require to make informed decisions.

Now: This is the time to get succession off the "to do" list. Government policy could change significantly over the course of a few budgets, so postponing a decision could make it more difficult to achieve your wishes in the future.

The first step 

Make a will. Many people put this task on the long finger as they do not want to think about the inevitable; in some cases there is total denial. Start the conversation about making the will by emphasising the need to plan for the future: “I don’t want our family to end up fighting like what happened with Jack’s family when he passed away.”

If there is no will, then the State will decide what happens to your estate. The Succession Act of 1965 is used to decide. For some, the will becomes the plan. For others, the will becomes an insurance policy so that their wishes are carried out if the succession plan has not been achieved because of an unforeseen death.

Communication 

Family involvement in planning for succession is essential. A key aim must be to have an open conversation with the people involved so that misunderstandings are avoided. Policy and taxation encourage early transfer, so it is important to have the conversation early to avail of all the incentives, some of which are complex, and may come with specific conditions. In most cases, however, the conditions are easily met.

A new CAP will commence in 2023 with a strong emphasis on generational renewal, so now is a good time to make a plan and get the benefit of the extra payment incentives that will become available.

Register today!

[ Register by visiting www.teagasc.ie/farmtransfer ]