Rural Edge Inspire Summit: Communication, organisation understanding key to farm succession planning

The challenges and emotions of family succession planning were laid bare in a session focused on the hot topic at this year’s Rural Edge Inspire Summit in Perth, with “communication, organisation and understanding” labelled key.

The discussion — featuring Northampton farmer Karl Suckling, RSM Katanning principal Marie van Blommestein, and HHG Legal Group Albany special counsel Matthew Lilly — was held on day two of the event and sparked plenty of questions from the floor.

The session was moderated by Oasis People and Culture director Stuart Wesley, who urged those in the room to think long and hard about why they were farming, and finished his presentation by asking a “potentially liberating and challenging” question.

“What if the farm is toxic for your family,” he said.

“Success might be to say ‘this enterprise is poisonous for our family’ and ‘let’s sell it’... so our family can start to be the flourishing and loving family we want it to be.”

Mr Suckling joked he had been sitting at The Miners Arms Pub in Northampton and was “ten beers deep” when he committed to talking on the panel earlier this year.

But he was motivated to share his story about a “really successful succession plan” with his parents, as his family moved towards the next one in about 10 to 15 years with his children.

He said the hardest part of the planning had been getting his parents to commit to the discussion.

Once everyone was “in the room and ready to listen”, it was much easier.

Mr Suckling stressed the importance of both short and long-term planning and making sure expectations were clear and reasonable.

“We spent a whole day after the family succession discussion, planning creating a family partnership document,” he said.

“It was the most daunting part… but it created clear boundaries and everyone knows the rules.

“So if there is a divorce or breakdown in the family, there is a pathway out of that.”

When asked what he would do differently the second time around, Mr Suckling said the family last year agreed to set two hours dedicated to succession planning discussions each year.

He and his wife have three girls — aged nine to 18 — while his brother and sister-in-law have three boys.

“Last year we started to prioritise time when we do our business meeting at the start of the year,” Mr Suckling said.

“We are at the stage where children are starting to think about coming back to the farm… but that looks we are still working out.

“But our main aim is designating two years every year to discussing how that looks.

“But that vision and formulating a short-term and medium strategy, it is always going to change.”

Mr Lilly said he had seen what went wrong within his family in regards to succession planning.

But he said he had lived through the experience of “how good it was” when things worked out.

“I am here (at the conference) to lend my support,” he said.

Ms van Blommestein brought 15 years of experience to the panel, through RSM Australia.

She also runs a mixed farm 15km south of Broomehill with her husband, and said as the daughter-in-law she understood family succession planning and the emotions involved.

“Going through the emotion and stages myself, I have really been able to help advise my clients,” she said.

“Succession planning is not an overnight project, it can take 10 to 20 years. Start early planning, and vision when and if you want to retire and what that will look like.

“From an accounting point of view, it helps having the correct structures in place to minimise tax when we get to the stage of handing over the farming asset.”

Mr Lilly said his crucial piece of advice was that once a family succession plan had been agreed upon, to document it in writing so that family members could read and refer to it in future years.

“If you have done through that process and don’t have that in writing… then the whole process has been a waste of time,” he said.

“Document it… there is a massive gap between having no documentation and some documentation.

“I would like to turn that into a legal masterpiece but even a few dot points is better.”

Each of the panellists highlighted the importance of communication in the process.

“A breakdown of communication is when it gets complicated,” Mr Lilley said.

The question of fairness between children – and if that should be measured by a dollar value – was also raised.

“There is a question of asking, ‘is this money going to help or harm’,” Mr Wesley said.

“The second part to remember is: ‘I will treat my children as individuals’.”