Conversations are the 'critical piece' to farm succession, conference hears

Ms Booth, owner of her own law firm, CO Booth Law & Advisory, Geurie, NSW, spoke at the Farm Tender 2024 conference at Marnoo on Friday.

In an address to the 200 farmer attendees, Ms Booth said "times are changing" as she gave a frank outlook on the reality of farm succession in Australia today.

"I think people are realising that if they leave it too late, the costs to their family, not just financial costs, but the human cost of doing nothing, is just too great," she said.

"I think people understand that if they get organised and they're proactive, even if the conversations are a bit awkward, the benefits and the dividends will mean that their legacy for the rest of their lives, and after they've passed away, can continue on."

Ms Booth said previously, just the top five per cent of Australian farm businesses were doing their succession planning early, when a farm-owning couple were in their 50s and 60s.

"I can now see that it's maybe the top 10 to 15pc," she said.

"So there's more people realising that if you can get organised and have a plan in place, you can review it every couple of years.

"The plan doesn't mean I must transfer the land before my death.

"It doesn't need to be black or white, all or nothing."

She said this change had come about through a move away from the old way of doing things, where some thought farm succession conversations might have been too "awkward" to have.

The lawyer also said there was now more support around farm families looking to sort out their affairs.

"The Australian experience is now at a wonderful time because we've got incredibly experienced accountants, financial planners and the agri banks," she said.

"They're incredibly sophisticated.

"We've got agronomists and livestock support teams who all understand that we're no longer in the business of banking equity.

"All banks are now serviceability lenders whereas 10 or 12 years ago, they were all equity lenders."

Ms Booth said because of this, the system around the family farm was now "incredibly well placed to support people".

She said this compared to 10 or 20 years ago, when the farms might have been smaller, with not so many specialised advisors.

Ms Booth urged farmers to work to find a suitable farm succession advisory team early.

"If it's not the right fit, then keep going until you find the right one," she said.

Fundamental to every farm succession plan was the farm-owning couple getting on the "same page", according to Ms Booth.

She said a couple needed to plan out when and how they wished to be semi-retired, retired, and looked after when they need healthcare assistance and palliative care.

She said they needed to plan for their death and how they want things to play out after their death.

"If the husband and wife are on the same page, then as a leadership team, they can guide the family and the children through the process," she said.

Ms Booth said such conversations helped children, both on-farm and off-farm, to become "incredibly comfortable with what the parents have decided".

"Whereas probably in the years gone by, people have seen this as a democratic process where it's what everyone wants and needs," she said.

"I think when you do that, you can possibly run the risk of people having expectations articulated and then you're not able to fulfil those expectations.

"Then people get really hurt.

"It's really interesting that it's no longer a sit around the kitchen table and let everyone have their piece."

The lawyer said if parents were on the same page when it came to farm succession, no one can "wedge" them.

"Then you have the ability to articulate what the plan is rather than this kind of reactive process which can cause so much sadness," she said.

Ms Booth also told farmers about the costs of not doing succession properly.

She said families can be torn apart over not understanding their parent's intentions after they pass away and that ultimately, protecting family relationships is key.