As advisors intimately involved with agriculture and succession planning, Vanrooy, Mills & Associates are advocates of the OMAFRA planning materials. Below, we have re-printed a portion of their March 2012 fact Sheet. Barry Mills, CPCA and our Legal and tax specialist, John Mill, LL M, Barrister, Solicitor and Tax Counsel, are available to meet with you for a No Obligation, Free Consultation to discuss your current Plan, and/or suggest how to begin the process, in the most tax efficient and fair manner possible.
The following information is from the OMAFRA Factsheet (Agdex# 812) published March 2010:
In addition, OMAFRA provides matching funds to reduce a farmer’s professional expenses in developing a succession plan.
Succession planning is a continuous process to plan for the transfer of knowledge, skills, labour, management, control and ownership of the farm business between one generation, sometimes known as the founder or retiring generation, and the next or successor generation. Succession is a process and not an event; it takes time and effort to work through and develop a comprehensive plan that best meets the needs of the farm family.
There are two main parts to developing a succession plan: (1) the "process" - discussing it, thinking about it, researching options, planning, deciding and (2) the "documentation" - recording the decisions through a written succession plan.
A succession plan deals the transfer of three main areas:
In most intergenerational farm transfers, the transfer of labour occurs first and is relatively straightforward. The transfer of management and decision-making, on the other hand, is not only the most difficult it is also key to the success of the entire process.
Management and decision-making transfer needs to be supported by a training and development plan. It will help to ensure that the next generation has the necessary knowledge and skills to take over and successfully operate the farm business in the future.
The transfer of ownership of assets involves the actual purchase/sale and/or gifting of the farm assets from one generation to the next.
The complete OMAFRA Factsheet: Farm Succession Planning