The Farmers Mart Dec/Jan 2014 - Issue 31

PROFESSIONAL SERVICES Estate Planning If you are the owner or involved in a farming business which is run by you and your family, there are a number of very important things you should consider to control and protect the farming business from external threats. These will help you to plan for your future, especially in these uncertain times. The external threats There are 5 main external threats which could have an impact on the future of your business: • Taxation • Insolvency • Divorce • Claims against the estate • Mental instability or emotional susceptibility of those involved in running the farming business or family members who own business assets Who needs protection and how can you do this? Those working in the business and the wider family group should be protected. This includes people not working in the business but who own shares or business assets. Different individuals will have different income and capital requirements; some may need more income and others may have good incomes but would like capital and/or voting (strategic) control so that they have a say in the running of the business. You may wish to consider the fragmentation of the ownership of the business or the assets used by the business through lifetime gifts. If a company is involved you can split share capital into different classes and amend the Articles of Association. You can prepare a family charter, pre-nuptial agreements and Lasting Powers of Attorney. 52 Dec/Jan 2014 FarmersMart Family Trusts By using Trusts you can separate the control of the farming business from the capital value of the business. Trustees should act impartially, and if they are not beneficiaries of the Trust they have no personal financial motive for making certain key decisions. A Trust could also provide centralised decision making and long term asset protection and control. Trusts can last 125+ years and the original owner as Trustee can control the business without remaining an actual owner for a considerable period of time. Wills If you die without a Will then both your farming business interest and the assets you own that are used by the farming business X^H

The Farmers Mart Dec/Jan 2014 - Issue 31 | Page 52