The third and fourth of the four key estate and farm succession planning questions – who is to receive your wealth, and how should they receive it.
Farming families often wish to leave their estates to their spouse, and then divide it equally amongst children when both parents have died. Challenges arise where one child is to receive the farm, particularly where the farm is the largest, or only, asset.
Using conditional gifts and trusts can assist to achieve a fair distribution of assets.
An ‘Option to Purchase’ can allow a family member to purchase an asset from your estate. An Option To Purchase clause can set out how the sale of property is to be structured, for example by including a method of valuing the property, or requiring repayments over a number of years.
Creating a life interest can allow a person or people to use the farm to generate an income for themselves or other people for a certain time, but not to have outright ownership until a triggering event occurs, which could be the elapse of a certain time period, or the death of a certain person, or payment of a specified purchase amount.
A conditional gift transfers an asset to a beneficiary, but only once they have fulfilled certain conditions. This can allow the recipient of farm land to use a gifted asset as security for a loan to pay out other siblings.
This is the fourth in a series of 6 articles on farm succession planning that aim to help you start the process to ensure an efficient transition of your wealth to your intended beneficiaries.
If you have any questions or if you would like to start the planning process, contact Trent McGregor today in Bendigo on 5434 6666 or Castlemaine on 5472 1588.
Wills & Estate Planning Lawyer