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On a day to day basis no farmers need us. 99% time get on with farming. But there’s a lot of other ‘stuff’ out there: Wills, Trusts, Retirement 0r Succession Planning, Insurance, ACC etc. No-one likes doing and it often gets left – until something happens and then it’s often too late.
Retirement by Selling How much do you need in retirement? When should you sell? And how do you convert capital back into income? Many farmers leave it too long before selling up. They over estimate the amount of capital they think they'll need in retirement so they sell late, don't have enough healthy retirement time and die with too much in the bank. We'll help you work out how much capital you will need in retirement and then draw up a retirement plan for you in advance, keep it up to date and then you will have a much better idea of when to sell. Don't work longer than you need to. Retirement by Family Succession Farm succession planning is complex: a farm needs to stay intact for it to be viable, however, non-farming children often expect a ‘cut’ from a farm which will only support one family. This is a situation faced by many farmers and a lot don’t address it – leading to the children falling out when the older generation is gone. Many farmers have a member of the family to carry on the farm but this means planning and talking together – which many families are uncomfortable with. That's where we come in:
Insurance is a tool – it’s there to do a job and to get value for money you need to match the tool to the job you want it to do. And farmers have different needs when it comes to insurance – which is why it’s important to make sure you have the right tool. You maintain your vehicles. Ask us to do a WOF check on your accident, income and life insurance. Don’t wait for something to happen before finding out that you've got the wrong type of insurance. Keep your ACC costs down too. Expert Advice throughout the South Island: The majority of our Farmer Advisory clients are based around the South Island (although we do have several clients in the North Island who have come to us through recommendations of friends and family!). Whether you're on a Canterbury dairy farm or a high country station - with the phone and internet, no farmer is too remote. |
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Personal Stories
Straightforward and sortedRob and Karen have two children, Mary is a teacher and Jim works at home on the farm with his father. When Jim left school and went into partnership with his parents they decided it was time to sort out their wills. But they couldn’t decide who was getting what so their lawyer sent them to have a chat with me.
The farm simply wasn’t big enough to split and was really only capable of supporting one family at a time, but Karen was anxious that their daughter Mary didn’t ‘miss out’. What we did was set up a long-term regular investment plan, creating an asset that would eventually go to Mary when the farm went to Jim. But it would take time for this investment to build up so we also took out a life insurance policy on Rob & Karen to produce cash in case they died before the investment plan had established a substantial value. The costs were paid out of farm profits so there was a bit less available for Jim but it meant that, in the end, he’d inherit the whole farm and his sister would get cash from the life insurance and/or the investment. But we did a couple of ‘extra’ things too. Firstly, we put the investment plan and life policy into a trust so that if anything untoward happened such as Mary dying before her parents or getting divorced, then ‘her’ money would be safe either for her (if she was divorced) or her children (if she’s died). Secondly the farm also took out a life insurance policy on Jim, so that if he died before his parents, his wife could get the money from this policy, which would mean Rob, & Karen could then pass the farm on to Jim’s or Mary’s children. |
What no one wantedVernon was the youngest of three children who were all teenagers when their mother died. When Vernon’s father remarried, he made a new will dividing the farm between the three children. The two girls eventually left home and moved away leaving Vernon farming at home with his father.
It was one of those families where no one talked much about wills or money and it was something that Vernon’s father had meant to sort out. But he didn’t. And when he died the negotiations between the family over the farm valuation and the unfairness of Vernon having to pay his sisters for all the years of his work, resulted in the relationship between Vernon and his sisters and their husbands breaking down. In the end Vernon took on a huge loan to buy them out but he couldn’t service it and in the end he had to leave the farm. Approaching an experienced advisor would have helped Vernon’s father to deal with the whole money business. And planning ahead would have saved the farm, and the family. Knowing you want to sort the problem is the first step. |
