FFF Insight 18 - The Missing Link in Family Farm Succession

Family Farm Succession – The Missing Link Has Been Found! 

After more than 25 years working with farming families, we think we’ve finally worked it out. 

For more than 25 years, we’ve been involved in family farm succession, and much of that work has understandably been reactive. Farming families often take action when they have to, or when circumstances force them too.  

Someone becomes ill or dies, aged care is suddenly needed, a son or daughter needs certainty, a family disagreement reaches breaking point, an asset needs to be transferred, a tax issue emerges or circumstances simply reach the point where decisions can no longer be put off. 

That’s typically when the professional advisers get involved. The accountant, consultant, lawyer, financial planner and sometimes the banker and valuer are brought in. Meetings are held, structures are reviewed, tax is calculated and everyone works incredibly hard trying to find the best solution.  

But decisions are now being made under pressure, sometimes they are forced, and time constraints can significantly limit the available options. 

We’ve spent a large part of the past 25 years doing exactly that — helping farming families solve succession problems. Some have worked out well. Others have resulted in terrible outcomes involving legal proceedings, significant financial costs and broken family relationships. 

The pressure is building across Australia.  The demand for succession expertise is growing, and we are seeing increasing concern about the potential for more family disputes. 

There needs to be a better way. 

So, we stood back and asked ourselves a different question: 

What if we could help farming families prepare for succession rather than waiting until circumstances force them to act? 

Instead of continually looking at why succession becomes difficult, we started looking more closely at the families where succession had gone well. The families that successfully transitioned the farming business, preserved significant family wealth, provided Mum and Dad with financial security, gave the next generation a genuine opportunity, appropriately recognised the non-farming children and managed to work through difficult issues such as fair versus equal while protecting family relationships. 

Most importantly, these families actually made decisions and implemented them. 

So we started asking: Why did the successful successions succeed? 

Was it a better tax structure? A better accountant, lawyer or consultant? A clever legal agreement? All of those things can certainly matter, and good professional advice is incredibly important. But the more we looked at successful succession, the more we realised there was something happening before the technical solution. 

Something that was easy to overlook. 

After more than 25 years, we think we’ve finally worked it out. 

The Missing Link Is Leadership 

When we talk about leadership in this context, we’re not talking about corporate leadership, and we’re certainly not suggesting Mum and Dad should sit around the kitchen table, decide what everyone is getting and then announce the outcome to the family. 

We’re talking about family leadership.  Taking responsibility for moving your family forward. 

That distinction matters because farming families make difficult decisions every day. They make decisions about livestock, cropping, machinery, employees, debt, land, markets, weather and risk. If the crop needs to go in, it goes in. If livestock need attention, they deal with them. If the bank needs information, they provide it. 

Those things have deadlines. Succession usually doesn’t. 

There’s always another harvest, another shearing, another season and another year. There’s nearly always a reason why now isn’t quite the right time. And succession brings with it issues that can be difficult to work through — money, ownership, retirement, control, fair versus equal, relationships, expectations, what Mum and Dad want, what the children want, how is ownership and control safely transitioned. 

It’s understandable why succession gets pushed back. 

The problem is that nothing happens until something happens. 

Someone becomes ill. Someone dies. Mum or Dad suddenly want or need to retire. A son or daughter reaches the point where they need certainty. Someone wants their equity. A relationship changes or financial pressure emerges. Suddenly succession changes from something the family has been meaning to do into something the family has to do. 

That’s often when the advisers are called in. But by then there’s an important difference: the family may be making reactive decisions rather than proactive choices. Typically, the pressure has built and there is already tension within the family. 

And that’s what we want to change. 

You Don’t Need to Be a Succession Expert. You Need to Lead. 

In most farming families, particularly at the beginning, that leadership needs to come from Mum and Dad or the senior generation. You’ve built the farming business, carried the risk and generally own or control the assets. Many of the decisions about the future are ultimately yours to make. 

But nobody ever taught you how to lead your family through succession. 

Leadership doesn’t mean having all the answers. It doesn’t mean deciding what everybody gets and announcing it. It doesn’t mean everybody has to agree, and it certainly doesn’t mean becoming an expert in tax, law, estate planning or business structures. 

Leadership means developing the knowledge, skills and confidence to lead your family through succession. It means understanding the succession journey, knowing the questions that need to be asked, gathering the right information and learning how to work through issues such as ownership, control, retirement, financial security, fair versus equal and the expectations of the next generation. It means being able to listen, consider different perspectives, understand the options and recognise when professional advice is required. Most importantly, it means having the confidence to make decisions, communicate them clearly and keep the family moving forward. 

In other words, leadership is not simply about starting a conversation. 

It is about becoming equipped to lead the succession journey. 

Operating Above the Line 

This is where another principle we talk about at Future Farming Families becomes important. When succession becomes difficult, it’s very easy to operate Below the Line: We’re too busy. The kids aren’t ready. Dad won’t talk about it. The accountant hasn’t told us what to do. We tried it once and it didn’t work. We’ll worry about it later. I’ve done my Will... 

Some of those concerns may be completely understandable. But they don’t move the family forward. 

Operating Above the Line doesn’t mean everything is your fault. It means accepting responsibility for what you can do next. Set the ground rules for communication. Establish a meeting rhythm. Ask questions. Listen. Gather information. Develop your understanding. Build your knowledge. Make informed decisions. Document those decisions and keep taking the next step. 

You don’t have to solve succession today. But you can take responsibility for what happens next. 

That’s leadership. 

Family-led. Adviser-supported. 

Leadership certainly doesn’t mean doing succession yourself. Accountants, consultants, lawyers, financial planners, bankers, valuers and other professional advisers can all have critical roles to play. 

But there is something your advisers can’t do for you. 

They can’t decide what your family wants. 

Your family needs to lead that part. What does Mum and Dad’s future look like? What does the transition look like? What does the next generation want? Who will operate the farm? Who will own or control it? What does financial security look like? How should the non-farming children be considered? What is fair? What does the family want to preserve and protect? 

Once your family starts developing clarity around those questions, your professional advisers have something incredibly valuable to work with. 

Instead of sitting down with an adviser and saying, “Tell us what we should do,” imagine being able to say, “This is what our family is trying to achieve. Now help us build the right solution.” 

That’s a very different starting point. 

It’s what we mean when we say: Family-led. Adviser-supported. 

Building a Bridge Across the Succession Canyon 

We describe the challenge facing many farming families as the Succession Canyon. On one side is where your family is today. You know succession needs to happen. You may have thought about it, discussed parts of it or even taken some initial steps. 

On the other side is where you want to be: clarity, decisions made, Mum and Dad financially secure, the future of the farm understood, the next generation knowing where they stand, professional advice obtained, documents completed and the plan implemented. The family is aligned, everyone understands their role and everyone is moving forward together. 

Succession Ready™. 

Between those two points is the canyon, filled with all the things that make succession difficult — different expectations, a lack of family alignment, confusion around fair versus equal, ownership, control, asset protection, tax, structures, retirement, financial security, financial capacity, estate planning and uncertainty about what needs to happen next. 

Looking at all of that at once can be overwhelming. And there are succession traps that even the best technical advice in the world may not be able to fix once circumstances have gone too far. 

So don’t try to jump the canyon and risk ending up at the bottom. The financial cost can be enormous, and family relationships can be damaged for generations. 

Build the bridge. 

Leadership is what gets that bridge started. 

The first part of that bridge is becoming equipped — developing your knowledge, understanding where your family and farming business are today, learning what needs to be considered, gathering the facts, understanding the options and developing the confidence to work through them. 

From there, your family can progressively make decisions and bring those decisions together into a clear Succession Blueprint™. Then the appropriate professional advisers can help turn that Blueprint into the right legal, taxation, financial and structural solutions — culminating in the Family Farm Succession Deed. 

The important point is that your family leads the journey. 

Your advisers support you. 

That’s Why We Created Future Farming Families 

After more than 25 years, we realised something needed to change. We can continue sitting around kitchen tables helping one farming family at a time — and we will — but what if more families could become equipped to lead succession before they reached a pressure point or crisis? Before the dispute. Before the deadline. Before circumstances forced the decisions. 

That’s where Future Farming Families fits. Our role isn’t to take control of your family’s succession or tell you what your future should look like. 

That’s for your family to decide. 

Our role is to share what we’ve learned and provide parents and family leaders with the education, knowledge, tools and practical frameworks they need to become more confident succession leaders. 

To help you understand the journey ahead, identify the questions that need to be answered, work through the issues that matter and progressively develop your own Succession Blueprint™. 

Then, when specialist professional advice is required, you can approach your accountant, consultant, lawyer, financial planner and other advisers with a much clearer understanding of what your family is trying to achieve. 

We are there to guide the journey. Your family leads it. 

What if Succession Goes Right? 

We spend a lot of time talking about what happens when farm succession goes wrong. Family disputes, lost opportunities, unnecessary tax, damaged relationships, additional costs and farming businesses being broken apart are all very real risks. 

But that’s only half the story. 

What happens when succession goes right? 

Mum and Dad can achieve financial security. The next generation can have the certainty and confidence to invest, borrow, continue building and growing the farming business, consolidate, improve the farm, introduce new technology and make long-term decisions. Non-farming children can understand where they stand. Family wealth can be preserved, tax can be planned rather than reacted to, relationships can be protected and knowledge can pass from one generation to another. 

And Mum and Dad can watch the next generation take something they’ve spent perhaps 30, 40 or 50 years building — and take it forward. 

That should be something to celebrate. 

Successful succession isn’t simply about avoiding something bad. It’s about creating something good. It’s about opportunity for all generations, security for the current generation, clarity for the whole family and the opportunity to Preserve, Protect and Prosper what generations of a farming family have worked incredibly hard to build. 

So Where Do You Start? 

You don’t need to solve everything today. You don’t need to have all the answers, and you don’t need to start with the final legal solution. 

The first step is to become better equipped for the journey ahead. Build your knowledge. Understand where your family is today. Learn what needs to be considered. Develop the skills to work through the difficult issues and the confidence to make decisions and keep moving forward. 

Most importantly, develop the leadership capability to lead your family through succession. 

After more than 25 years working with farming families — often helping when succession had already become reactive — we finally stood back and asked why the successful successions worked. 

We believe we’ve found the missing link. 

Leadership. 

Our role at Future Farming Families is to give farming families the resources, knowledge, tools and frameworks to put that leadership into action,  while keeping the family where it belongs: at the centre of its own succession journey. 

Family-led. Adviser-supported. 

Future Farming Families — A Different Approach to Farm Succession. 

Not Sure Where Your Family Should Start? Started but Feel Stuck? 

Complete the free Australian Family Farm Transition Benchmark™. In around five minutes, you’ll establish where your family is today, identify areas that may need attention and take the next step towards becoming Succession Ready™. 

We also recommend watching Crossing the Succession Canyon to better understand how to build the bridge and become Succession Ready™. 

Watch: Crossing the Succession Canyon → Future Farming Families - Crossing the Succession Canyon