Industry Eye: It will pay to act early over succession planning and so avoid those costly and often painful family disputes

Furthermore, most landowning families are sitting on land and property assets worth considerable sums of money (and rapidly increasing) but delivering minimal return on capital employed.

Farmers are mostly asset rich and cash poor, often the single major issue when passing on to the next generation.

Family disputes are common causing huge stress to the family, often ending with siblings divided and massive solicitors’ and agents’ fees. Often the farming assets are simply not big enough to support more than one family.

A 500-acre farm may be supporting three generations when in reality it would do well to support one.

However paying out siblings is often not an option, as most businesses don’t generate sufficient profits to afford the significant mortgages required. Often the parents do nothing causing additional stress upon their death.

We are keen to bring succession planning to the forefront of family discussions at an early stage.

It’s a really good idea to talk as children are planning university, identify what they are good at and what they want to achieve.

Is it to come back to the farm or to set up a new venture or to move away from the traditional family business?

If it’s been identified that there are two that want to come back and farm, perhaps the plan is to purchase a farm for the second sibling, and the first sibling takes on the mortgage – much better starting this when they are young, rather than having the dissolution when they are in their early 50s and with young families to consider.

If the decision is to leave it to all the siblings in equal proportions, who will farm it in the short term and will the long-term aim be to sell?

Personally, I don’t think it’s viable to split down the generations otherwise we will end up like the French owning small slithers of land.

It is a good idea to identify what everyone wants to do and what ultimately the parents need to fund their retirement bearing in mind we are living longer and this is becoming more costly.

Having those discussions early, allowing everyone to make their own decisions and setting out a plan for the passing on of the business and assets is key.

It requires open, honest and frank discussions and leadership from the senior family members and ultimately agreement from all.

Often having a third party involved to chair the discussions and raise new ideas is useful and can reduce any awkward moments.

Finally, remember to review your plans regularly as things always change and most importantly, try not to fall out, there is nothing worse than a family who don’t speak to one another.

n George F. White have offices in Bedale and Shiptonthorpe, North Yorkshire; Alnwick, Northumberland; Wolsingham and Barnard Castle in County Durham; and Park Lane in London.

n Louis Fell can be contacted at the Shiptonthorpe office on tel. 01430 876010; www.georgefwhite.co.uk