A legacy or a liability - Farm succession from a bank advisor, lawyer & family coach
One of the most precious gems in New Zealand’s food & fibre sector is the family farm, so how do we ensure that the intergenerational business model can survive a changing world?
L-R: Philip Pryor, Family Business Central, Phoebe Davies, Wynn Williams and Tom Laming, NZAB
“The earlier you've got communication, transparency and honesty, I think the more likely you are to get a fair outcome. and that can start with kids as teenagers being quite open about the business,” explains Tom Laming, NZAB.
In this week’s Sarah’s Country’s Opinion Maker we break-down practical tips and advice on how to have the conservations that set up family business to be a positive legacy with the following on our panel:
Philip Pryor, founder of Family Business Central
Tom Laming, client director, NZAB
Phoebe Davies, partner, Wynn Williams
Key points of discussions:
It starts with first knowing where you want to end up and having harnessed emotion around fairness, honesty & transparency to have productive conversations.
It’s crucial to run farms as businesses with structures such as Shareholders Agreements & Relationship Property Agreements.
Philip works with families to have two types of governance - Family governance (with a family charter) & business governance (with a board of directors) so you can have separate conversations and a positive Christmas lunch!
Family member’s relationships with their spouses can be a delicate discussion to protect the farm asset, but it’s important to be upfront about a contracting out agreement.
Banks look at the risks around succession and want a strategy to manage this risk.
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