Statistics Canada recently released the 2016 census and much attention has focused on a new statistic – only 8.4% of respondents declared having a written succession plan.
Can that be right? Is it possible that we were answering the question too literally?
By definition, succession means the “the order in which or the conditions under which one person after another succeeds to a property, dignity, title, or throne.”
In literal terms, for succession to take place, someone has to die.
Is it any wonder that so few of us choose to commit that plan to writing?
Maybe it’s time to change the conversation and remove the word ‘succession’ from that conversation.
A better question might be, do you have a plan in place for the continuation of your farm business as existing owners/managers exit?
Whether you’re among the 8% with a written plan or the 92% without one, Benjamin Franklin pointed out that there is indeed a plan for all of us (i.e. the inescapable death and taxes).
In the simplest of terms, those of us with no plan will have all our assets deemed to be disposed on the date of our death and added to our income for that year. That combined amount may be taxed at a rate higher than we would want. Add in probate fees and too much of estate could become public property. That is not a good plan!
There are many tax planning opportunities available to farm families to offset this tax liability. So where do we start?
Plans change – a checklist allows us to prioritize the items to be addressed immediately and those which can wait.