Farm Ireland
Independent.ie

Friday 9 December 2016

keep it in the family Succession on farms can be fraught, but fear not...help is at hand

Published 16/02/2010 | 05:00

More than ever, farm families have to give serious thought to what provisions they've made for the future and who'll take over the family farm.

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The changing economic landscape and changes in the traditional social and family structures have all given an added impetus to succession planning.

Biting the bullet and delving into what can often be an area fraught with tension is not easy for all families. Sometimes it can be helpful to have the benefit of an impartial ear.

Mallow-based Clare O'Keeffe says it's often security fears that are the catalyst for people to seek professional help. Having completed research on succession on family farms for her Nuffield Scholarship in 2006, Clare went on to set up Succession Ireland, a mediation service for families, with her colleague Breda Lankford.

"The interest in the subject comes from my own background," she says. "I was one of six girls that grew up on a farm outside Mallow, which I now own.

"We had to work out the issues surrounding inheritance of the farm as a family and who was to get what.

"We all worked on the farm as children and the first thing we had to work out was what each of my sisters would receive."

This might seem a straight forward enough process for some, but reaching an amicable agreement that suits all parties is not always easy.

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Clare sees the function of her business as one of mediator, with the primary concern of maintaining harmony throughout the planning process.

"It's usually when conflict has already emerged that we're being brought in as facilitators," she says.

"When it comes to mediation on family issues, there's a sense of embarrassment and that 'we should be able to work this out ourselves'.

"We often have people who'll ring and say, 'you've never had a family like ours'.

"Each case is different but there are similar threads that run through all and lack of security is a factor in most."

Once a mediator is engaged, the process involves setting up a family meeting with the focus on communication and finding a solution that suits all parties.

"We ask people what are their hopes and their concerns for themselves and their parents.

"We don't allow them to criticise their brothers or sisters. They have to stay focused on what they want, but the stakes are high and there's an emotional current and so we have to stay focused," she says.

Often it's the case that one family member may be reluctant to engage with a mediator and put up some resistance.

In such cases, their absence is taken as consent that they will go along with a majority decision. Clare says this is often enough to make sure everyone is present.

The also have a strict policy of dealing only with the family of origin and so in-laws are excluded to keep the focus on the parents and the siblings.

Often there is a successor but even in these cases there are still areas that the whole family needs to think about and decide who takes responsibility for what.

"Perhaps there'll be a nursing home requirement for the asset holders at some stage and the family needs to decide who's going to pay for that.

"Maybe there's an assumption that the person with the farm can afford to and that's another decision that needs to be made.

"Perhaps there's liability on the farm, such as servicing banks loans. How is that going to be shared out? Do loans transfer with the asset or do they need to be viewed in a different way."

Financial limitations are often the biggest concern in families, Clare maintains.

Often the asset holders don't have the security of a nest egg, while the realisation that the successor's marriage might break up is another concern.

Another frequent worry is a family member with a disability or special needs and what provisions will be made for them.

"These are all real fears and we allow that discussion to be heard, but we also have to allow for the farm to be a viable unit so that the successor can make a living. So we have to strike the balance there," she says.

How long the process takes depends on the complexity of the situation and the cooperation of the family.

"It can be resolved relatively quickly, in some cases in one or two meetings, but sometimes people want more than what is fair."

In the event of the asset holder not being happy with the decision, there's always the 'sunset clause', which stipulates that the successor will not realise all the value of the asset if it is sold within a certain period of time.

As to mitigating against marriage break up, Clare concedes that there's not a lot that can be done here apart from advising people to make good choices with their partners.

To find out more contact Clare O'Keeffe and Breda Lankford of Succession Ireland at 086-6013365 or visit www.successionireland.ie

Irish Independent