Most farming families are running on a handshake and a shared sense of what was meant. That holds until somebody dies, somebody separates, or two siblings remember the same conversation differently.
Even where there’s a plan, and even where a lawyer has drafted it, it has usually never been tested against the things that actually blow these arrangements up. Five questions worth putting to yours. All of them are uncomfortable. All of them get dearer the longer you leave them.
One. Who was promised what, and when?
A son who has worked fifteen years on wages well under what he’d have earned anywhere else, because he was told the place would be his, may have an enforceable claim. Whether or not it ever made it into a will.
The High Court settled this in December 2024 in Kramer v Stone. A man worked a farm for 23 years on the strength of a promise, for very little money, and won. Two defences landholders used to have went with that judgment. The promise doesn’t have to have been repeated down the years, and the person who made it doesn’t have to have known it was being relied on. Saying it once, twenty years ago, and never mentioning it again is no longer a defence.
Be deliberate with your kids about it: work out what’s been said and to whom, pay market wages or write down why you aren’t, and where a promise was made that isn’t going to be kept, have that conversation now rather than leaving it to a barrister.
Two. Who could make a claim once you’re gone?
A current, properly drafted will is exactly the document that gets challenged. In Victoria a child who reckons they weren’t adequately provided for can apply to the court for more, and a farm estate where one kid holds the land and the other holds a good deal less is the obvious shape for that argument.
The useful part is that a claim generally only reaches what’s in the estate on the day you die. Assets that genuinely moved out years earlier usually sit outside it. Another argument for transferring steadily across a decade rather than leaving the lot to the will, though how that works in your structure is a question for your lawyer, not a rule of thumb.
Three. Is the place big enough to bother?
Nobody enjoys this one, and every plan assumes the answer is yes. GRDC’s modelling puts the threshold at roughly $2.8 million of land and $500,000 of machinery, throwing off about $500,000 of farm income, to properly support one family. Two families off the same country is a much harder question.
If the honest answer is that it can’t carry the next generation, transferring it anyway just moves the problem down the road. Sometimes the better play is to sell well, at a time of your own choosing, and pass on the proceeds. That’s a perfectly respectable outcome, and it beats finding out the hard way in eight years.
Four. Whose name is still on the bank paperwork?
Handing over the trust and the running of the business doesn’t take Dad off the personal guarantees, and it doesn’t release the bank’s security over the land. That exposure sits there quietly for years after everyone thinks the handover is done, and it turns up at the worst possible moment. Get the bank in the room while the plan is being built, not afterwards.
Five. Does it survive a bad year?
Not an average year. The year with no autumn break, or the year prices go the wrong way while you’re carrying more stock than you’d like. If the lease payments, the trust distributions and the parents’ income all still hold up in that year, the plan is real. If it only works on the averages, it isn’t a plan yet.
If one of them worries you
Most plans we look at survive three or four of these and come unstuck on one. That’s normal, and it’s easier to fix while everyone is alive and still speaking than after somebody has died.
Start with your accountant. They hold the structure, the entities and the history, and they’re best placed to say which of the five matters in your case.