Background:
Our client is a third generation farmer who specialises in sheep. We identified that the Farmers needed to update their Wills. The difficulty that arose is that one child worked on the farm, whilst the other children did not.
Issues:
The issue was how to distribute assets and ensure that the farm would continue, which had been in the family for a number of generations. The farm was considered high risk, as it only had one product. Their main source of income was only earned twice a year, and they felt they could not expand as they did not know if they could adequately manage their financial commitments. The business also faced lack of cashflow due to the drought and therefore they were finding it difficult to make decisions on purchasing more stock or upgrading capital items which would adversely affect cashflow in the future.
Process:
We worked with our Clients to complete the Estate Planning by initially organising a meeting with the Solicitor and ourselves to brainstorm and listen to ideas of what the Client would like to see in their Will. By working with the Solicitor we were able to provide a suitable outcome that would mean all children were looked after equitably. The outcome also meant that the son on the property would also be able to continue farming, as was the wish of the mother, without the risk of his siblings selling the farm.
Preparing the cashflow and going through the income and expenses with the Farmers meant that they gained greater appreciation for what they needed to achieve to reach their goals. They have been able to triple their livestock numbers as the working son has a greater understanding of how his cashflow works. The farm now has more stock lines and diverse income sources to help minimise risk to the business. The Farmer is now a more educated and skilled business person from our training and advice in relation to what drives his business.
Results:
The client was able to achieve what they wanted to with their will. This gave them peace of mind that any issues to do with their estate would be minimised.
There was improved management of property, as the client had the tools and skills to understand how to effectively run the farm as a business. Without our help, they may have found that as the farming industry gets more difficult, they may have been constantly struggling to keep their farm in the future.
They previously had a limited relationship with their bank. With the improved management of the property, the bank manager started talking to them. They were also able to borrow more money at better interest rates as the bank manager was impressed with how the business was managed financially.
If you would like us to help you improve your business so that you can achieve your business and lifestyle goals, please call us on 5413 9300.