Succession Plan for Family Farm
A family farming partnership consisted of the father and the mother and two of their children. The partners also had two non-farming children. The parents own a significant amount of farmland, but had little else in the way of non-farming assets.
The parents wanted their farming children to take the business on and develop it further. They also wanted to ensure that their non-farming children received some wealth from their estate on their passing. The parents did not want the farming children to have to sell off land in order to pass wealth to the non-farming family.
How we helped our client
EQ prepared a succession plan for the parents, outlining the potential implications on their estate and the legal obligations that would have faced the farming children in the event of their passing. This would have resulted in a significant legal rights claim potentially being made on their estate by the non-farming children. The farming children would have needed to take on significant additional debt or sell land in order to fund these claims.
In conjunction with a financial advisor recommended by EQ, we built a succession plan to fit the clients’ needs. This involved taking out joint life assurance, in order to pass over significant wealth to the non-farming children and to ensure that the farming children did not have to sell off any of the farming assets to cover legal rights. This cooperation between the advisors left the clients confident that the business will be able to continue and grow, and happy that all of their family will be looked after in the event of their passing.
For more information or to discuss further, please contact the Private Client Taxperts.