Fair and equal are not the same thing

Kondinin Group put it at 18 per cent. That’s the share of Australian farming families with a legally binding succession plan in place. Everyone else is running on a handshake and a fair idea of how it will all work out.

What trips most families up is the kid who isn’t coming home, not tax.

Splitting the place down the middle can look fair on paper. In practice it hands half a working business to somebody who doesn’t want it, and leaves the one who does with an operation too small to carry the debt. Country that pays its way as part of a 3,000 acre run is a hobby block on its own. Farms rarely halve well.

So stop asking how to cut it evenly and start asking what each of them needs. The one on the farm needs the operating assets. The country, the stock, the plant, and the authority to make calls on all three without ringing anybody first. The one in town needs something that works without a tractor attached, whether that’s cash, a property or a portfolio. Those two things run on different clocks and they almost never add up to the same number in the same year. That’s where most families stall.

Fair means both kids end up with something that fits the life they’re actually living. It rarely means half each.

The conversation nobody starts

Ask a farmer when he’s retiring and you’ll get a line about being carried off the place. Ask what the actual plan is and most have one, they just haven’t said it out loud.

Which means everyone else is guessing, and they’re all guessing differently. The son who came home at 24 assumes it’s his. The daughter who went to university assumes she’ll be looked after somehow. Neither has been told anything. Both are building a life on it.

Start five or ten years out, because the tax positions, the bank and the family all move at their own pace, and none of them can be hurried at the end.

What actually works

There’s no single fix. The families who get this right use two or three things together.

The most common is not making the town kid wait. If the land is moving across fifteen years, a daughter in her thirties is in her forties before anything reaches her. Bring part of the inheritance forward instead, as cash or as capital in a structure she controls, and she gets on with her life on roughly her brother’s timeline.

Where there’s country to spare, some of it can go to the child who isn’t farming and be leased straight back to the one who is. Income and an asset, no business to run. It also answers what happens to that block in thirty years, which an even split never does. Where the land can’t be carved up at all, insurance does the same job. A policy on the parents’ lives with the non-farming child as beneficiary funds the payout when it’s needed, and nobody has to sell a paddock to square up with a sibling.

Then there’s the small stuff that causes the biggest rows. If the house goes to one child, the parents’ right to live in it has to be in writing. Same with the machinery, the water, and the shed everybody assumes goes with a particular block.

The awkward one

Wherever gifted or inherited land is involved, both kids should be looking at a Binding Financial Agreement. It sets out in advance how that country gets treated if a relationship ends, which matters because a property settlement can otherwise force the sale of land the family has held for four generations. Both parties need their own lawyer for it to bind.

Do it for both children, not just the one on the farm. Asking only the son’s partner to sign is how a sensible protection turns into an insult.

And keep the wills current. A transfer programme running a decade needs an estate plan that keeps up with it. Every time a title moves, the will gets rewritten. Otherwise a death at the wrong moment leaves everybody relying on a document describing a farm that no longer exists.

Where it starts

None of this gets sorted in one sitting. It takes years, which is the argument for starting while it’s still your call rather than something the family deals with after a funeral.

The first conversation is with your accountant. They know the structure, the entities and the numbers, and they’ll tell you soon enough whether it’s worth bringing in a specialist to work through the rest.