family succession and planning for the future? just wondering how many of you find this a positive experience and have any tips and advice for others?

[farmerm]

It's something I think about most days, my parents won't even discuss it, and I have a brother who has taken massive drawings out of the business to fund his and his family's lifestyle and schooling and a sister who is not entitled to anything having had her share out years ago but will I'm sure will challenge what is stated in the wills and happens to be the apple of my mother's eye ! Whenever I ask if everything is in order regarding wills etc I get told it is and not to worry ! As far as I'm concerned when one of my parents passes the whole lot will be to sell to sort it out ! I also have an aunt who is in her 90s that owns several properties and some land which when she passes will have a massive tax bill to pay, and none of her stuff is registered with the land registry to make matters more difficult ! I will have all this to sort out one day !

Your parents (and many like them) need to sit down together with you and you siblings, in a neutral venue, and have a grown up discussion about what assets would go to whom in the scenarios of either one or both of them dropping dead tomorrow. Would they rather explain, express and agree their wishes to you all whilst they are alive or would the rather leave a mess behind that will put large sums of their life's efforts into the hands of solicitors and courts and leave nothing but anger and resentment and destroy what ties remain between their children? If they are willing to accept the later you need to be clear you are willing to carve a new future elsewhere.

 

[Treemover]

Your parents (and many like them) need to sit down together with you and you siblings, in a neutral venue, and have a grown up discussion about what assets would go to whom in the scenarios of either one or both of them dropping dead tomorrow. Would they rather explain, express and agree their wishes to you all whilst they are alive or would the rather leave a mess behind that will put large sums of their life's efforts into the hands of solicitors and courts and leave nothing but anger and resentment and destroy what ties remain between their children? If they are willing to accept the later you need to be clear you are willing to carve a new future elsewhere.

While I agree totally the best option is to be upfront and discuss all this amongst the family; when this does not happen; it can be difficult to just walk away. Various reasons would include time and investment put in.

I think in a situation where all siblings have contributed equally or contributed little; it’s a lot easier. Or age plays too; easier walk away when your 20 and your life is your own.

 

[Landrover]

Your parents (and many like them) need to sit down together with you and you siblings, in a neutral venue, and have a grown up discussion about what assets would go to whom in the scenarios of either one or both of them dropping dead tomorrow. Would they rather explain, express and agree their wishes to you all whilst they are alive or would the rather leave a mess behind that will put large sums of their life's efforts into the hands of solicitors and courts and leave nothing but anger and resentment and destroy what ties remain between their children? If they are willing to accept the later you need to be clear you are willing to carve a new future elsewhere.

It's not an easy situation, and causes me anxiety and depression and at times a strained relationship with my wife because of it. I remember my father saying to me when I was about 19/20 that I will probably have a difficult life with regards to my brother and sister that was probably my time to get out, but a sense of loyalty to my parents throughout my life kept me here. I suppose having always been treated as the "spare" in regards to my siblings has clouded my view ? My parents have there reasons for doing what they do so who am I to judge ! I don't expect much when the worse happens so wont be disappointed !

 

[farmerm]

It's not an easy situation, and causes me anxiety and depression and at times a strained relationship with my wife because of it. I remember my father saying to me when I was about 19/20 that I will probably have a difficult life with regards to my brother and sister that was probably my time to get out, but a sense of loyalty to my parents throughout my life kept me here. I suppose having always been treated as the "spare" in regards to my siblings has clouded my view ? My parents have there reasons for doing what they do so who am I to judge ! I don't expect much when the worse happens so wont be disappointed !

I fully understand the strain these things cause, believe me!! If your father was open and honest enough to tell you what he did when you where 20 then that does give me hope that he can open up again. You perhaps need to find a life point to reset the conversation, a significant birthday perhaps or some else dying "Dad I know we have discussed this before but seeing..... recently got me thinking again , a conversation must be had, one that is not based on greed or jealous but rather about simply ensuring the future security and happiness of both myself, my siblings and your legacy. The inevitable truth is one day you wont be here and it may come suddenly without warning (as all as it did for my father). It is important that I and my siblings understand from you, not from some solicitors document, what your wishes and expectations are. I do not want us to become another one of those family ripped apart by disagreements of money and assets, I do not want us to have to fritter your years of hard labor and toil into the hands of solicitors so they can sip Champagne in exclusive ski resorts and sunbath on private yachts, I know you do not want that either..... When it comes to estate planning fair and equal are not necessarily the same. If your intention is for the farm to remain a viable then its is important the provisions made ensure it is and that my siblings understand and are in agreement with your wishes. If your intention is to share equally then you and I need to accept that would mean selling the farm is inevitable and I can at least plan that into my future. (if you have the fortune of children insert them here....) if you can have your siblings and mother on side first.. Its just my tuppence for all its worth, I don't know exactly what next weeks Will reading will have in it... I am fortunately not to have difficult siblings or in-laws (at least I think that is the case!)

 

[harrow]

When they die and it all gets left to the cats home

 

[som farmer]

i know of 1 case, where a daughters father deliberately surrendered an AHA first generation tenancy, because he didn't like her husband, and boasted he'd stopped him getting the farm. What he didn't know, was it didn't really matter, son in law had other land, and buildings heading his way. But it illustrates how it can stir up vindictive actions, you constantly hear of these 'disasters', and still people do not make, or update wills. Now, with land prices where they are, some don't write wills, simply because they don't know how to share it out, fairly. Not an excuse though.

 

[Hampton]

Yes three of us, my parents and my self. No I haven’t invested any of my own savings mainly because I’ve only ever taken a peppercorn drawing (£600month) of which I was happy to do this as this would grow my Share. The little bit I did save went towards buying a house with my wife that we rent out.
I lived at home until we got married then my parents bought a cottage that we moved into of which the business rented but my wife and I paid all the bills. Then when our second child was due when wanted to move into one of the farm houses so mum and dad decided to move to the other house and I would move into the house at the dairy.
Responsibility wise I basically run the farm (Dad refuses to have a phone ) sort staff, order all inputs, sorting contractors and manage the dairy plus cropping decisions. Make future plans/direction of the business. This side of things works well With dad (I just have to remind him to tell mum) as he’s quite happy to let me get on with it.
One of the things this process has brought up is the need to have regular business meetings to discuss everyone’s feeling goals and ambitions.

£600/month is not enough.
you need to pay yourself a minimum of £800/month as a wage in order to qualify for national insurance and so a reasonable state pension.
No point waiting for a business that may not be viable then retire on no pension

 

[dinderleat]

£600/month is not enough.
you need to pay yourself a minimum of £800/month as a wage in order to qualify for national insurance and so a reasonable state pension.
No point waiting for a business that may not be viable then retire on no pension

We are a partnership and I’m allocated 33% of the profit so more than qualify for national insurance it’s been a hard month

 

[Fake it ‘til you make it]

I'm a bit afraid as my father has a huge amount of vineyards and he has a big wine production of it. So I understand that one day it will come to me and I'm not as good as he in it. That's a big fear and I need soo much time to spend learning everything about the production of wine and vineyards..

That sounds like a nice problem to have

 

[Overby]

These things drag on and on and I speak from bitter experience.
I thought we were getting sorted only to have the 'awkward' spoke on the wheel now creating more problems.
Said chap refused to plan for family split for last 25 years, even though repeatedly told it was coming. Actively refused to have investment in his farm, insisting money spent on 'home farm' (where he has never lived) even though it was stated over and over again 'it's for when we split so you have facilities at your place'. Now. split has happened, comes whining all the time saying there's no faciliies at his gaff and just walks off when reminded that we have all been aware of his silly little ruse (it's all rented and he's been more than adequately compensated with extra land out of goodwill, despite the above nonsense). It's crackers.
The awkward one was also offered to live at said 'home farm', twice, in the 90s. and have it purely for himself, and point blank refused! Yet now insists it is somehow his.
2 generations involved (with a 3rd only a few years away from working age), the awkward 1 is in his 70s and will not give an inch (well he will, when forced, but we want to avid the unpleasantness).
It's pathetic.
Why is farming so full of these oddballs?
Tenancies are all done though, when push comes to shove he'll get shoved but there really shouldn't be any need. The next generation need looking after but it's so hard to do when the one 2 previous is only concerned with himself.
I pity any one else going through the same.

 

[Greythundercloudys]

My mum and dad thought they would go on forever, but of course they didn't, absolutely no plans was in place, just the promise it will all be yours one day, but was as simple as that, had to pay of two sisters, who have never done a day's help on the farm since they were 13. And all the lawyers stuff etc etc. Can be a bit of a nightmare all for a upland sheep place. But it's mine now.

 

[dinderleat]

I don’t think it’s just farming businesses, I think any family business goes through the same thing.
But yes it does seem the older generation are incapable of thinking/dealing with succession to the point that’s it detrimental to the business.

 

[Rob91]

I am 30, my brother 27, worked on the farm every single day since we left school (and a ton of work before that) like most. My Dad doesn't want to do any kind of succession plan , and now they're paying tax bills rather than put me and my brother in the partnership. There's nothing worse.

 

[Hampton]

I am 30, my brother 27, worked on the farm every single day since we left school (and a ton of work before that) like most. My Dad doesn't want to do any kind of succession plan , and now they're paying tax bills rather than put me and my brother in the partnership. There's nothing worse.

Crazy.
You won’t persuade them though.
you need to get someone they trust to persuade them.
Could be a relative, Financial advisor, neighbouring farmer etc.
Someone without a vested interest.

 

[Overby]

I am 30, my brother 27, worked on the farm every single day since we left school (and a ton of work before that) like most. My Dad doesn't want to do any kind of succession plan , and now they're paying tax bills rather than put me and my brother in the partnership. There's nothing worse.

Been through similar sadly. Not allowed to be a partner, expected to jump to attention for orders *TBF my old man was fine, but he was in partnership with other family who were awful / deluded). Fortunately for me, unfortunately for the business, the stubbornness was leading to financial ruin and the relevant powers in the end would only speak to me after I sat in on a couple of meetings. I used that 'in' to swing things my way....it was very hard though and there were horrendous situations to deal with. You need to find a way for the foolishness to be pointed out indirectly. Will they not even invest rather than pay tax, ie use up allowances etc? I'm familiar with the feeling and still cant understand the mentality.

 

[dinderleat]

I am 30, my brother 27, worked on the farm every single day since we left school (and a ton of work before that) like most. My Dad doesn't want to do any kind of succession plan , and now they're paying tax bills rather than put me and my brother in the partnership. There's nothing worse.

Can you speak to your accountant to sort a plan out in order to reduce your tax bill..... ?

 

[Rob91]

Can you speak to your accountant to sort a plan out in order to reduce your tax bill..... ?

They have, but the tax bills are going to keep coming, as my Dad buys a lot of new machinery with the money he saves from not paying wages , which causes depreciation

 

[Rob91]

Been through similar sadly. Not allowed to be a partner, expected to jump to attention for orders *TBF my old man was fine, but he was in partnership with other family who were awful / deluded). Fortunately for me, unfortunately for the business, the stubbornness was leading to financial ruin and the relevant powers in the end would only speak to me after I sat in on a couple of meetings. I used that 'in' to swing things my way....it was very hard though and there were horrendous situations to deal with. You need to find a way for the foolishness to be pointed out indirectly. Will they not even invest rather than pay tax, ie use up allowances etc? I'm familiar with the feeling and still cant understand the mentality.

They have bought new tractors and machinery for the capital allowance, but now stuff is so expensive the depreciation has caused a "profit" and a big tax bill.

 

[Thick Farmer]

They have bought new tractors and machinery for the capital allowance, but now stuff is so expensive the depreciation has caused a "profit" and a big tax bill.

I thought that high depreciation would decrease profit?

 

[dinderleat]

They have, but the tax bills are going to keep coming, as my Dad buys a lot of new machinery with the money he saves from not paying wages , which causes depreciation

If you are employed you need a proper wage. For me personally I wouldn’t of come home if I hadn’t been made a partner but we are a tenant. I’ve still got my issues to deal with.
it does come to a point when you need to lay your cards on the table and say if things don’t change I’m off life is too short.