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The 3 Biggest Farm Succession Mistakes to Avoid
Farm succession can feel like something that can always be dealt with another year.
But some of the most difficult situations I've seen didn't happen because a family made one huge mistake.
They happened because decisions were made in the wrong order, important conversations were put off, or circumstances changed before a proper plan was in place.
Here are three of the biggest mistakes I've seen — and why dealing with succession earlier can make such a difference.
Mistake 1: Making One Decision Without Understanding What It Does to the Rest of the Plan
Succession isn't a series of completely separate decisions.
What you do today can affect the options available to you later.
I've seen situations where property was transferred to the intended successor before the farm itself was dealt with.
At the time, the decision made sense.
But when the farm was later being transferred, that earlier decision had changed the successor's financial position and created problems when valuable tax reliefs were being considered.
I've also seen sites — including sites with planning permission — transferred before the wider farm succession was properly looked at.
Again, it appeared to be a separate transaction.
It wasn't.
A decision involving one asset can have consequences for what happens to another.
The lessonIn succession planning, the order you do things can matter just as much as what you eventually do.
That is why it is worth understanding the whole picture before individual assets start changing hands.
Mistake 2: Waiting Until Circumstances Force the Decision
Some of the most difficult succession situations I've encountered weren't the ones with the biggest tax bills.
They were the ones where a family suddenly ran out of time.
I've seen families where succession had been discussed for years but never properly planned.
Then somebody died unexpectedly.
Suddenly, questions that could have been worked through gradually around the kitchen table had to be answered while the family was grieving.
- Who was supposed to get the farm?
- What did Mam or Dad actually want?
- What happens to the other children?
- What tax could arise?
- Who owns what now?
- What happens next?
And sometimes those unanswered questions exposed disagreements that had been sitting underneath the surface for years.
In some cases, families that had previously been close ended up divided.
The tragedy wasn't simply that the succession plan hadn't been completed.
It was that the family lost the opportunity to make those decisions together while they still could.
The lessonStarting succession planning early doesn't mean transferring the farm early.
It means giving yourself time to have the conversations, understand the options and make important decisions before circumstances make those decisions for you.
Mistake 3: Planning the Transfer Instead of Planning for the Family
It is very easy for succession planning to become focused on one question:
“How do we transfer the farm?”
But a successful succession has to answer much more than that.
- What income will Mam and Dad have afterwards?
- Where will they live?
- What happens if one of them later needs long-term care?
- Could the Fair Deal Scheme become relevant?
- What does the farming successor need?
- What has already been promised or assumed?
- What happens to the other children?
- Is everyone expecting the same thing?
- And what happens if circumstances change?
I've seen situations where families concentrated on transferring assets without first dealing with the people who depended on those assets.
A succession can be technically very tax-efficient and still produce a very poor outcome for the family.
The lessonA successful succession isn't simply one where the farm changes names.
It's one where the farm has a future and the family is still in a good place afterwards.
Why timing matters
Why Starting Earlier Matters
Starting succession planning does not mean you have decided to transfer the farm.
It does not mean everything needs to happen immediately.
And it does not mean you need to know exactly what the final answer will be.
Starting earlier simply gives you something incredibly valuable:
Time.
Time to understand what everyone wants.
Time to identify problems before they become urgent.
Time to look at the tax, legal and financial implications.
Time to consider things like retirement, long-term care and the future income of the older generation.
Time to change direction if circumstances change.
And time for the family to have conversations while everyone can still be part of them.
You can always decide not to transfer the farm yet. You can't go back and give yourself more time.
A moment to reflect
Four Questions Worth Asking Yourself
Before you leave this page, take a minute and honestly answer these four questions.
- If nothing changes, where are you going to be five years from now?
- What does that mean for your parents?
- What does that mean for your children or the next generation?
- When are you actually going to do something about it?
You don't need to have all the answers today.
But if those questions are difficult to answer, that's probably not a reason to keep putting succession off.
It may be the reason to start planning it.
Straight-talking farm succession guidance from a qualified financial adviser and fourth-generation farmer.