For them to really benefit from all their hard work and make sure their livelihood is taken care of, a detailed financial plan that covers the spectrum of succession planning, insurance, investments and superannuation is essential.

1. Succession and Estate Planning

An extremely important step to ensuring the continued success of an agribusiness is succession and estate planning.

Often a farmer has spent their entire life building their farm and its business, possibly handed down from earlier generations who have done the same, so the question of how the ‘family business' will be taken forward can be emotional and complex.

There's also the question of how the property will be divided if there are numerous beneficiaries.

"For the majority of farmers, their primary asset is the actual farm which is not easily divisible, especially if someone wants to remain on the property and others have no interest in that lifestyle," says Jan Watman, National Manager Suncorp Financial Planning.

"So, if that beneficiary continues to work the property, they will have to compensate others. Often this means they need to borrow large sums of money against the property to ‘buy out' other family members, sometimes creating additional financial hardship at an already difficult time.

A succession plan tailored to cater for the different needs of those involved - and which is discussed and agreed upon by them - can be vital in ensuring the future of family businesses like these.

A financial planner experienced in the particular issues that agribusinesses face can bring any potential issues to the fore and help create a succession plan that works for the family.

2. Peace of mind via appropriate insurance

An experienced agribusiness financial planner can also provide invaluable advice on insurance issues relevant to those in agriculture.

Income protection, life, trauma and total and permanent disability insurances are all important for anyone with an income and financial assets to protect.

Yet many aren't aware that there's also a range of specialist insurance covers to meet the specific needs of those involved in agribusiness.

"A financial planner can advise you on the most appropriate insurance policies available so that you have peace of mind that you can get through a difficult time or an unexpected event such as death, injury or illness", says Ms Watman.

3. Financial Planning

Superannuation and retirement planning are as important for those involved in an agribusiness as anyone else.

Investing in the future and ensuring that you have adequate funds for retirement by using tax effective strategies is an important consideration for those at any stage of life. In addition to superannuation, an experienced agribusiness financial planner can advise on a range of investment options to protect and build wealth.

"Having the main asset as rural property, most farmers' finances tend not to be adequately diversified into other investment types, such as equities," says Ms Watman.

"By implementing an effective investment strategy, it's possible to reduce an overexposure to price fluctuations in rural properties by diversifying into a number of different investment types."

Source: www.farmbusiness.com.au