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Generational transfer can culminate in the immediate withdrawal and retirement of the parents or it can start well before the older generation is ready to retire. A transition over 10 to 15 years is often beneficial.

Key points:

  • Farm generational transition can start well before the older generation is ready to retire. Commence with the transfer of management responsibility. Asset transfer should be the final focus.
  • Financial security in retirement for the parents is the first and most important objective.
  • Generations farming together and sharing business profits and access to land can be an important interim step.
  • If both generations are farming together during the transition the profit allocation can recognise the contribution and needs of each generation to allow independent financial growth.
  • Transitioning a viable business to the next generation is the next step. For broadacre farms, business scale sufficient to achieve farm income of $500,000 per on-farm family is a starting point to determine business viability.
  • Business health check guidelines can help to determine what business income, costs, debt and assets are required for a viable transition to the next generation.

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