Estate Planning for Rural Families: 5 Part Webinar Series for Lawyers & Accountants

Program 1: Restructuring the Farm with Estate Planning in Mind

At the heart of any successful family farming operation is a solid and sound business structure. While in most cases the choice is driven primarily by tax considerations, this approach can create issues when the time comes to turn to estate planning requirements.  Restructuring the farm with estate planning in mind can save a lot of time and money down the track. This session looks at the structuring of family farming enterprises to bring in future generations, including:

• Tips for identifying when a restructure may be needed to be reviewed or revisited
• Different options available to restructure the farm, the pros and cons and impact of each from an estate planning perspective
• What is the exit strategy and how will it impact the restructure?
• When and how to use family and/or testamentary trusts and deciding what should go in them - does the farm go in?
• Understanding and identifying risk and liabilities of farming operations and how to ensure there is something left for the estate
• Practical case studies

Program 2: Unravelling the Mess: Dealing with Debts, Gifts, Loans and Lease Agreements in Farming Families

Families are messy, with farming families perhaps even more so! Particularly when it comes to financial arrangements including gifts, informal loans, intra-family lease agreements, debts, terms of advancements …the list goes on. The level of informality that is common when it comes to intra-family financial arrangements, as well as the tendency for to be land rich but cash poor, creates all sorts of complications and issues when it comes to estate planning. It can be hard sometimes knowing where to start!  To help estate planning professionals, this session shall look at:

• Agricultural and informal loans and debts common in farming families – how to identify a potential loan, assess whether it is genuine and how to deal with them in an estate planning context
• Best practice guide to formally recording gifts, loans and lease arrangements to ensure consistency with estate plans and avoid issues arising during implementation
• Creative options for considering the distribution of debt and dealing with mortgages when the land securing debt is going to different children and tips for managing relationships with financiers
• Practical case studies

Program 3: Let Me Count the Ways: What Estate Planners Need to Know About Family Law Risks to the Farming Estate

The breakdown of a relationship can wreak havoc on even the best laid estate plans. While in most cases, a separation will prompt an urgent need to revisit the plans and, in some cases, start afresh, the potential family law implications for estate plans go well beyond just the effect of separation on a will. In farming families, the implications can be drastic and can originate from the breakdown in relationships of adult children or grandchildren and their spouses, as well as from the testator’s relationship. To help estate planning professionals consider the potential family law implications on an estate plan in a farming family context, this session, presented by a family lawyer, shall discuss:

• When an estate may be vulnerable to a family law property settlement claim:
  •  Defining when a relationship has broken down
  • The legal effect of separation in the absence of or pending a divorce
  • Time limits that apply and when may an application to file ‘out of time’ be successful
• The circumstances in which family law proceedings can be initiated even in the absence of a breakdown in relationship (e.g. adult children from former relationships commencing litigation once parent lost capacity to effectively preserve their inheritance etc)
• The role of “mum and dad” and the farming accountant when family law litigation is commenced by their child or their child’s spouse and what happens when a testator passes away prior to the finalisation of a family law property settlement
• The effect of a family property settlement on a deceased estate and the effect of a death on the obligations of a testator under existing family law agreements or orders

Program 4: Promises Versus Practicalities: Balancing the Needs and Expectations of On and Off-Farm Children in an Estate Plan

As the value of rural land continues to rise, so too does the level of discontent within families when assessing ‘what is fair’ when it comes to their inheritances. For farming families, children, particularly the off-farm children, are increasingly challenging wills and attacking the estate once mum and dad pass away. Reducing the risk of a will or estate being challenged after death in these circumstances requires not only a well-structured estate plan but sound communication skills and strategy to ensure all family members are informed and comfortable with the decisions being made in advance. A task certainly easier said than done! To help estate planners, this session explores:

• The challenges of dealing with children unequally and potential funding strategies that could be put in place to manage off-farm children, including use of life insurance, creating off-farm wealth, and superannuation
• Tips for making a family plan - how to help the family understand ‘fairness’ with practicalities in mind and their role in family discussions
• How to effectively use a deed of family arrangement, what they should include (including when to record an early transfer in a deed) and when independent advice is required
• Steps that can be taken with younger clients to avoid issues arising when it comes to retirement - balancing farm assets with off-farm assets, transfer to beneficiaries at retirement
• Practical case studies

Program 5: Thinking Outside the Box: Creative Approaches for Dealing with Tax in the Estate Plan

Usually, the goal for family farming enterprises is to achieve a good financial outcome for all family members. In an estate planning context, this means ensuring that tax is not left as a mere after-thought. To help estate planners consider the range of creative options that may be available, this session explores:

• The relevant tax exemptions available for farming families including exemptions for moving land around, small business concessions, GST, CGT etc (and flag potential stamp duty concessions that may be available in different states)
• Tips for identifying tax liabilities, tax related issues for an estate plan and options for dealing with them in an estate planning context, including strategies for deferring tax bills
• Some of the more creative opportunities for CGT concessions arising from phasing generations in (and out) of the family farming arrangements
• Practical case studies