As part of the financial literacy components, the final one is estate planning and retirement for farmers. This is one of those topics that we do not talk about enough.
Somehow, estate planning makes us feel like we are planning for our death – at least that is what I have experienced, but it is truly one of the most important components of financial literacy.
As a business owner, I look for business continuity beyond myself, and I work hard so that the next generation can carry on with the business and farming beyond my survival.
Because of this, it is necessary to plan beyond ourselves, beyond living, how you want your farm and ownership to be handled once you are no longer here.
It is with this background that estate planning is important for farmers to ensure the smooth transition of their business’ agricultural assets and properties to the next generation or whoever they select as beneficiaries. Below are some considerations for estate planning for farmers:
Set up a will: A will is a legal document that details how you wish your assets to be distributed after death. It is also important to have a valid and up-to-date will (updated whenever necessary) that clearly says what your wishes are when it comes to your farming operations, business, land, livestock and other assets as you may wish. This can be done through consultation with an estate planning attorney, someone who has experience in agricultural estates to help you draft a comprehensive will.
Make sure to create a succession plan: This is a farm succession planning that involves deciding who will take over the farm or agricultural business when and if you retire or become incapacitated. It is important to involve all interested parties, such as family members or business partners in the planning process. Take into consideration the interest, capabilities and commitment of the people you select for the succession planning, and that they will be able to carry out your wishes in good faith to minimise the risks of conflict.
Make sure you understand the tax implications involved: Analyse the estate tax implication in the Namibian context, as this may have an impact on the transfer of agricultural assets. Understand the tax law, requirements and exemptions accordingly. Again, please make sure to consult with a tax professional who specialises in agricultural taxation with regard to estate planning and transfer.
Please understand that estate planning can be a complex process and that specific strategies and considerations may vary, depending on your unique situation; it is not a one size fits all. Thus, it is advised that you consult with professionals within the industry, such as tax accountants/advisors’ estate planning attorneys or agricultural consultants who have experience in estate plans tailored to your specific situation. More to follow in the next column.
Managing consultant at Simpli Business Advisory