There are a few myths which need to be overcome in the succession planning process.Jim Benson from Next Rural walks us through these myths and explains why they can get in the way of progress.Often families are faced with the problem that more than one child wants to come onto the farm and they find the business is simply not big enough to support more than one family. The answer they believe is to make the property bigger. Perhaps the blocknext door has just come on the market and it's an opportunity too good to miss. What is often forgotten is that there are two sides to the balance sheet. If the purchase brings with it a substantial increase in debt, it may result in reducing the optionsavailable to plan for transition rather than increasing them. Perhaps the children do not want to inherit the debt or would have not made the purchase if it was their choice. The most important question to ask is - would the parents have increased theirdebt position at a time when they are approaching retirement if there was no succession? If this is the case then the next generation has to be part of the decisionmaking process and must be prepared to take on the associated liabilities as well as theassets.
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