PKF Carr & Stanton Director Campbell Brenton–Rule was contacted by a prospective client. This gentleman owned a sheep and cattle station was given 12 months to live having been diagnosed with Cancer. He had numerous concerns for the future of his wife and the farm which had been in his family for many generations. He was clear that he didn’t want the farm sold. He also wanted to ensure his wife was able to survive on the farm without him. Who would work on the farm? How would the succession of the farm be handled? What role should the family solicitor play in all of this? Who would take over the day to day bills, GST and PAYE? What would the financial position be and would the farm survive without him? What role does his will play in all of this? Is a Trust a good option in this scenario? What could the tax consequences be on his death?
Unfortunately no pre-planning had been completed by the previous accountant. That week he gave notice to his previous accountant and we set about putting together a plan which dealt with:
- The operation of the farm
- Management Structure and remuneration
- Financial Forecasting to make sure it stacked up
- Selling surplus assets to retire debt
- Minimising all tax impacts - GST, Income Tax and Gift Duty
- A new simplified accounting system taking care of reporting and GST requirements
- Setting up trusts for the beneficiaries of the farm to aid in Asset Protection
- Matrimonial protection for the beneficiaries
- A limited liability Company for the Farming Operation.
- Working with the family solicitor to ensure wills were up-to-date and trust deeds were tailored for the beneficiaries
- Certainty of income for his wife
- Communicating the succession plan to all immediate family members and hearing all of their concerns to make sure they were catered for as best as possible.
Fortunately we had sufficient time to implement most of these changes before he died.
A few years on and the business is working like clockwork. All the family know where they stand and they can get on with their lives without having to worry.
Unfortunately, this situation is not uncommon and although the specific situations may be different, these sorts of issues need to be tackled by every farming family at some stage in their life.
Part of our role is to work with our clients to develop a plan, carry out the steps achieving the goals and monitor the plan regularly so it is easy to stay on track. The relationships developed in these projects are what gives us satisfaction and pride in the work that we do.
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