Preparing a succession plan for your farm is a complex
undertaking that requires many types of expertise. It's
imperative that the advisors involved in the process – like
an accountant, financial advisor, lawyer, family dynamics advisor
and any other required expert – are all collaboratively on
the same page, ensuring your plan a success.
Blending family and finance
Many people, and even some professional advisors, consider farm
succession planning an entirely financial process. We've
discovered that actually considering family dynamics is the first
step we take with clients. We need to determine who the key players
in the farm business are right now, which children are involved and
which ones are not. We also really need a sense of everyone's
goals. From there, we always talk to all family members who will be
impacted directly or indirectly to understand their perception of
the succession plan, even if they're not in the business.
During this discovery discussion, we identify what we call
"combustion points," – sources of conflict that
could cause trouble in the future. We need to understand the
complexities of the family dynamic before we even start
strategizing finances, accounting and legal. That way, we know if
something needs to be addressed differently from the outset. We
don't want to make these discoveries when you're about to
sign final documents, wasting time and money on a plan that has a
high probability of not being implemented.
Communicating as a team
Communicating as a succession planning team should also be a
priority right from the beginning. We gather the entire advisory
team together, so we're all getting the same information
directly from you. When meeting, we ask the questions that are
pertinent to our respective area of focus, and all of the critical
information is shared. From there, we make sure our information is
accessible to all team members to assist with their respective
Expanding the team
Once family dynamics have been considered and the holistic
strategic plan has been developed, discussed and approved by the
family, it still has to be executed. This includes helping families
establish distinct roles and responsibilities. For instance, how is
a daughter or son going to know whether they're performing up
to mom and dad's expectations? What is their five-year plan? In
the past, they were left to their own devices to answer these
Averting a crisis
In the past, before we created our Farm F.I.T.N.E.S.S. Program
(a professional succession plan advisory team) we found the process
of creating and implementing a plan was significantly more fraught,
as was ensuring farm families had the best experience.
For instance, when we operated as independent advisors in a
succession plan process we put together a very thorough, detailed
plan only to discover it was not always implemented and documents
were not executed. Family relationships were strained, agreements
had to be renegotiated. In the end even though everything turned
out well, the client experience was not what we wanted – this
become the catalyst for creating our current Farm F.I.T.N.E.S.S.
So make sure you choose succession-planning advisors who possess
the expertise required to get your strategy in place. With the
right team on your side (who are all accountable to each other) you
can pass on your family farm operation with peace of mind.
Mike Andrewsis the President of
Andrews Wealth & Well-Being Inc. a consulting firm focused on
advising families through business succession. Mike's team, The
Andrews Group has also been providing financial advisory services
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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