Navigating Farm Succession: A Practical Guide for Farmers

Succession planning - passing the farm on to the next generation - is one of those things most farmers know they should do, but few actually start. It’s not just about who inherits what; it’s about keeping the farm running, protecting family relationships, and making sure everyone’s financially secure.

Leaving it too late can mean legal headaches, arguments, and stress for everyone involved. The good news? With some upfront conversations and a bit of planning, you can make the transition smoother for you and the next generation.

Why succession planning matters

This isn’t just a paperwork exercise. A clear succession plan helps keep the farm in the family and avoids messy disputes down the track.

The challenges most farm families run into are:

• Not knowing what’s next – Unsure when to retire, or whether your kids want to take over.
• Not talking about it – It’s awkward, emotional, and often avoided until it’s too late.
• Legal and financial headaches – Wills, taxes, asset division - it can get complicated without advice.

Start early, and you’re more likely to end up with a plan that works for everyone.

Key steps to get it right

1. Start the conversation early

Don’t wait for a crisis. Sit down with the family and talk about the future.

Tips:

• Pick a quiet time, not during planting, seeding, harvest, or lambing.
• Get everyone involved so no one feels left out.
• If things get tricky, bring in an objective facilitator to keep the conversation on track.

2. Know what you want

Before making decisions, ask yourself:

• Do I want to fully retire, or stay involved?
• When do I want the transition to happen?
• What do the next generation want from the farm?

Writing it down helps everyone get on the same page. A documented plan is far more likely to actually happen.

3. Understand your farm’s structure

The way your farm is set up legally and financially affects how succession works. Common setups include:

Structuring your farm business for succession can take time, and the earlier the process starts, the more options you’ll have. Good structures don’t just happen overnight, they require careful planning, clear communication with the family, and alignment with both short-term and long-term goals. 

4. Sort the finances

A plan isn’t just about who gets what - it’s about making sure both retiring farmers and successors are secure.

Things to think about:

• Is the farm financially strong enough to support multiple generations?
• Are debts under control?
• How much income will you need when you retire?
• Can planning now reduce minimise taxes later?

Working backward from your retirement needs (reverse budgeting) helps set realistic targets.

5. Prepare for the unexpected

Farming is risky - so plan for the “what-ifs.” Some common risks:

• Death – Who runs the farm if someone dies suddenly?
• Disability – Can operations continue if a key person can’t work?
• Divorce – Will assets be tied up or split?
• Disaster or disease – How does the farm cope?
• Disagreements – Family arguments happen.
• Debt – Can the farm survive financial strain during transition?

Having clear agreements and contingency plans reduces stress and keeps the farm running if life throws a curveball.

6. Get expert professional advice

Family talks are essential, but professionals make sure the plan actually works:

• Wills and estate planning
• Tax-efficient asset transfers
• Business restructuring
• Retirement financial planning

It may feel like an expense, but the cost of not planning is usually much higher.

7. Put it into action and keep it alive

A succession plan isn’t “set and forget.” Review it regularly as things change.

What to do:

• Write a formal plan covering roles, responsibilities, and finances.
• Set timelines and milestones to keep things on track.
• Hold family meetings to avoid misunderstandings.
• Check finances and legal structures periodically.
• Train successors so they’re ready to take over.
• Adjust the plan for family changes like marriages, kids, or new careers.

By treating succession as an ongoing process, you protect the farm, the family, and the future.

Take action today

If you’d like help taking care of your farm’s future, contact us on (08) 9071 2173 or at admin@smithshearer.com.au to organise a meeting with our Director, Gavin Smith. As a CPA specialising in farm succession planning, Gavin is dedicated to helping farming families develop sustainable businesses that support generations to come. He can guide you through complex transitions, making sure your legacy and financial security are protected.

Don’t wait to secure your business’s continuity. Start your succession planning today to create a prosperous and harmonious future for you and the next generation. The future of your farm and your family is worth it.