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Creating a succession plan to transfer a family farm

On Behalf of | May 8, 2015 | Estate Planning

When it comes to planning for the succession of a family business farms are likely not the first thing that comes to mind. The reality however is that for some families in the Mississauga area farming is how they make a living. As is the case with any other type of family owned business there are sometimes issues with the transfer of the business to the next generation. To try to keep those issues to a minimum is it important to work with an estate planning lawyer to create a succession plan.

Communication throughout the process is key. When the parties involved feel that they can share their concerns, conflicts may be cut off before they get out of control. An area where communication could help to avoid conflict is where the roles of each family member are concerned. For example, having a discussion about who should be the head of the farm rather than just announcing who that individual will be could make the decision easier to swallow for those who were not selected. Likewise, when a family member chooses to leave the business, having an open dialogue about it could prevent hurt feelings all around.

The person who is planning to hand the business off to family members needs to be aware of a couple of things as well. First, he or she needs to be prepared to let go of the business when the time comes. Retirement is often easier for someone who has cultivated hobbies before that transition is made. That said, in some cases it is a good idea to maintain a physical space for that person to have an office so that he or she can feel as though they are still connected.

The person handing a business off should also determine what they believe a successful transition looks like. Once that is determined, other family members need to be behind it. This something that can be done years before the succession actually takes place.

While the use of an estate planning lawyer on the front end to create a succession plan can help to avoid disputes later, when a succession plan is not clearly laid out it is possible that litigation could ensue. In this situation it is even more important that those involved in a dispute have a lawyer on their side who understands this area of the law.


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