Carrick Aland’s succession skills organise farm and business families
If selling is not on the agenda, most families know they have to do something about handing their farm or business onto the next generation, but it doesn’t have to be a hot potato.
Succession planning can be a very emotive topic
Combine money, ambition, desire and family dynamics into the conversation(s) about your business future and things can get emotional. Combine possible death, disability and blended family considerations into the conversation and it may be even more charged.
Carrick Aland acknowledges this and accepts that, in helping to achieve the best financial outcomes, all parties need to have the issue of succession out front all the time, but you need to be organised in order to create a successful succession.
Often farming or business families have a wish for things to be passed onto the successive generation, but are not necessarily sure how to put in place a strategy that sees this desire become reality.
AIM: When Carrick Aland is engaged to assist, the goal is to manage the machinations and make succession as smooth and seamless as possible.
Stressless succession – the methodology
“The first step is discovery,” says Carrick Aland Partner David Johnston. “It’s akin to seeing what ingredients you’ve got and what pie you want cooked. You’re better off being honest and getting your cards on the table at this stage.”
Being accountants and advisors, Carrick Aland has an in-depth knowledge and understanding of a client’s family financial circumstances and structure.
“We can quickly assess what debt levels and assets a business has, understand the viability of farm operation and if something can be financially split,” David says. “Plus the longevity of our client relationships means we know the backstory thanks to having recurring contact with our clients.”
Once you’ve got all the ingredients, the next step is determining, from a financial perspective, what is actually possible and can realistically be achieved, and then planning to make decisions agreed upon a reality.
Throughout the process all decisions and their basis are recorded in a formally documented Succession Plan. This includes defining key objectives and future vision, options taken and the necessary steps of implementation.
“Carrick Aland is very much about presenting all the succession pathway options,” says Partner Wayne Turner. “Looking at the unique circumstances of each family group with respect to their assets and liabilities, structural issues, tax considerations and much more.”
Whilst Carrick Aland are well positioned to be the key providers of relevant financial and business advice, we also need to work alongside a number of key advisers, typically:
- Independent mediators or facilitators to help guide stakeholders through key decisions if required
- Lawyers to draft agreements, documents and Wills and put the plan into a legal framework
The Succession Plan is prepared so that critical issues are decided and recorded, leaving no outstanding matters that could require urgent resolution once the plan is formally activated. These include, but are not limited to:
- Land purchases/transfers
- Debt reduction, and
- Off-farm asset accumulation
Whilst communication and honesty is vital, patience is the most important virtue when planning for succession as the process and the plan may take years to execute. The end result is the creation of a unique succession strategy appropriate not only for the business or farm, but for each family member.
When a succession plan is activated, the process allows all stakeholders to assume their predetermined roles and successfully take over the reigns.