Succession Dilemma

There was an episode on Australian Story ‘Call of the River’. The story was about Kate advocating for the bush and the Darling River. Kate was independent and strong minded. An issue arose between Kate and her father Rob which highlights the dilemma that many rural families face – succession planning.

Rob in his early sixties, operated the family sheep farm. Rob himself was strong minded and independent. Both he and Kate butted heads on various issues. Rob was for planting more trees on the farm to obtain carbon credits in managing the land. Kate saw carbon credits as making profits for businessmen rather than land management.

Both Kate and Rob had different views and goals for the farm including that of succession planning. Kate asked Rob to address his succession planning for the farm. Rob failed to address his succession plan with Kate. This left Kate frustrated without certainty about the farm forcing Kate to leave the farm and pursue her own career. This caused a rift between Rob and Kate and their relationship became strained.

Kate and Rob’s succession dilemma resonates with many rural families including family-owned businesses such as my own family. My parents immigrated to Australia with no money, worked two or three jobs, saving every penny so that they could start their own grocery business. The grocery business was successful, and my father hoped that one of his children would take over the business. Coming from a Chinese background, this wish was bestowed on my eldest brother.

Like Kate and Rob, my father and brother butted heads. My brother had grand plans to grow the grocery business and make more money. My father was conservative and risk adverse. Having different goals and vision for the grocery business, resulted in my brother walking away. As my father was unable to pass down the grocery business, my father was forced to sell the business without a succession plan.

Having the experience with assisting clients with succession/legacy planning, I would have wished I could have helped Kate and Rob and my own father and brother put in place a succession plan. Having a succession plan should not be ignored and involves three key critical steps:

1. Discuss and understand what the family wants in terms of their goals, vision and differences

2. Have a written succession plan via a family charter or family constitution

3. This is the most critical – agree on a date for stepping down and relinquishing control to give certainty to the next generation.

While it is too late for my father and brother to have a succession plan, for other families like Kate and Rob, having a succession plan is important.

Albus Legal provides legal services to clients in agribusiness and primary production, family-owned businesses with a key focus on preserving wealth, legacy planning and transferring wealth to future generations.