Farm / Ranch Re-Organizations
Family farms and ranches are the backbone of Alberta’s agricultural sector and a fundamental part of Canadian society and history. Entire generations of families have toiled the same soil or grazed cattle on the same grasslands.
However, as families age, they are faced with the issue of passing the land along to the next generation. That is where we can help. We will look at your farm or ranch assets and help you draft a Will that provides certainty and flexibility for the next generation.
What Are My Options For the Farm?
There are many ways to deal with a family farm or ranch in a Will. For example, families with more than one child may wish to provide for the transition of the property to the son or daughter who is involved in the business. They will also want to provide a structure in which any other children may enter or exit the business.
Other options include dividing the acreage up equally. If one child does not want to tend to the land, they can rent it to their sibling who does. Or one heir can agree to purchase the entire farm, the proceeds of which would be split equally among the siblings.
Each family farm business is unique and no single approach will work for everyone. That is why any succession plan must involve all family members with an interest in the land.
Are There Tax Implications?
When it comes time to pass along a ranch or farm to the next generation, a financial reorganization of the agricultural assets may allow for the succession of the business in a tax-efficient manner. Click here for general tax tips on passing on farmland from the Canadian Revenue Agency.
While Kantor LPP does not provide specific tax advice, we work with tax experts to help realize our client’s objectives for the reorganization of their business.
A Guide to Agribusiness Succession
To facilitate the transfer of ownership and capital to children, relatives or other successors, the Alberta government publishes an online handbook titled Transition Planning Guide for Agribusiness. The 268-page guide breaks transition planning into three phases: readiness assessment, plan development and plan implementation. It also urges residents to seek legal advice when drawing up succession plans.
Start Early With Succession Planning
With any type of succession planning, it’s always best to start early. That means creating a plan before you reach retirement, so you can take the time to consider everyone’s needs as you work through the process. The longer you put off setting a succession plan in place, the more difficult it will become. It may also result in added costs, with the inheritors forced to sell the family farm.
Farms and ranches are becoming more complex, which is another reason to seek legal advice on your succession plan.
Contact us to ensure that your Will includes a succession plan that reflects your wishes for the land you leave behind.