Planning to help next generation

Planning to help next generation


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After her negative experience with succession planning, Marian Macdonald recommends a frank understanding of what everyone wants and is thinking and a succession plan that enables people to upskill and have a knowledge of the equipment and other assets owned by the farm.

After her negative experience with succession planning, Marian Macdonald recommends a frank understanding of what everyone wants and is thinking and a succession plan that enables people to upskill and have a knowledge of the equipment and other assets owned by the farm.

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THE Macdonald family's tradition of farming in South Gippsland since the 1840s was at significant risk this century because of a number of 'worse case scenarios' over a period of 15 years and lack of a succession plan.

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THE Macdonald family's tradition of farming in South Gippsland since the 1840s was at significant risk this century because of a number of 'worse case scenarios' over a period of 15 years and lack of a succession plan.

The first 'worse case' was when Marian Macdonald's brother died, followed some years later by her parents' divorce; then her father, Allan, remarrying in 2001 and later his diagnosis of terminal cancer.

Mixed into the thick of it was Allan's new will that excluded his daughter and favoured his wife and poor communication between all parties.

The dairy farm was run by Allan with considerable input by Marian and her husband Wayne -- they were the weekend milkers, Marian did the bookwork and they invested in an additional house on the property.

"We spent a year's wages and time fixing up a house for farm-stay accommodation and thought dad could eventually retire to running it, when we took over the dairy," Ms Macdonald said.

"But then dad said he might use the house for a sharefarmer.

"It was our fault; it was a classic case of we were doing it for everybody without everybody's buy-in."

The next surprise was when Ms Macdonald brought up the subject of succession planning.

"A consultant suggested leasing the farm from dad's new wife, who would hold a life interest," she said.

"Dad thought it was a fantastic idea but the most basic discussion revealed his wife was unwilling to entertain investment in or maintenance of the farm.

"We felt stonewalled even before beginning."

Ms Macdonald decided that rather than pursue discussion, they would preserve a good relationship with Allan.

"But we should have persisted so it didn't wait until he was on his deathbed," she said.

"In 2006 we found dad had cancer and it had metastasised.

"I talked to him about taking over the farm and wanting to work out a succession plan.

"That's when we found out about the new will.

"Then we found out the farm was for sale.

"I told dad I didn't want to challenge his will in court and tried to discuss with him and his wife other scenarios, including her financial situation and what she needed in retirement."

Ms Macdonald emphasised that as well as including everyone involved in discussions, multiple plans needed to be developed.

"The process of getting to the final will was horrendous -- we were thrashing out settlement in the hospital ward during dad's last weeks," she said.

"People need to have these conversations early and work out what everyone wants to do.

"It doesn't take long to run a farm down but it takes a long time to bring it back."

Allan's final will enabled Marian and Wayne to buy the farm, although it meant they incurred a large debt they are still servicing.

With two young children, a 200-hectare dairy farm, 260-cow Friesian herd, various on-farm and off-farm assets, the couple have begun succession planning for the next generation.

"If you don't do succession planning, it doesn't allow the next generation to upskill, so it is a challenge for them to take over and understand everything that makes the farm run," Ms Macdonald said.

"It's one thing to be working on the farm and another to be holding the reins.

"I don't like reliving the past but if it can help one family avoid the hell ours went through, then telling our story will be worthwhile."

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