Ph 0800 327 646 www.fedfarm.org.nz
August 2016 National Farming Review
17
ESTATE PLANNING
Ensure trusts are compliant Farmers have been warned to pay closer attention to their succession and estate planning, after it was revealed up to 85 per cent of New Zealand trusts are non-compliant. The analysis by Perpetual Guardian is seen as a wake-up call for the rural sector, where many farms are in multi-generational ownership. Farmers must also contend with the new Health and Safety at Work Act, which came into effect in April, placing personal liability with farm owners if an injury or fatality occurs on their property. To help farmers address these issues, Federated Farmers has launched a new partnership with Perpetual Guardian. There are several common mistakes in the governance of trusts that farmers need to be aware. This ranges from trustees’ failure to understand the scope and weight of their responsibilities, problems with the finer details of gift and debt forgiveness, understanding of transfer of assets and use of personal bank accounts for trust purposes, a lack of minute books and annual accounts, no records of decisions, and no annual meetings. Perpetual Guardian CEO Grant Kemble says they are aware of cases in which farmers have appointed a neighbour or friend as trustee or executor, and parties are not aware of the potential risk and legal implications of such a responsibility. “Farmers work hard and have little time to think about their personal affairs as a result, which can see their estate and succession planning suffer. “It is easy to overlook the endgame when you are busy dealing with new regulations, bad weather, or any number of other
challenges. That is why it is crucial to have trusted advisors who understand your needs and ensure your affairs are structured appropriately. Our focus on relationships positions our clients as the central hub of the wheel through which we bring together specialists. These include accountants, insurance advisors, lawyers and farm managers. We coordinate these relationships to produce a plan that works for individual farm operators’ needs. Farmers should also consider the importance of ensuring they have up-to-date, legally sound wills to ensure their wishes are fulfilled. Founder of Perpetual Guardian and business leader Andrew Barnes’ vision for the New Zealand fiduciary services sector is to ensure that Kiwis better understand the importance of estate planning, and that access to these vital services are affordable and easy. To better meet the needs of farmers, Perpetual Guardian has
IT IS EASY TO OVERLOOK THE ENDGAME WHEN YOU ARE BUSY DEALING WITH NEW REGULATIONS, BAD WEATHER OR ANY NUMBER OF OTHER CHALLENGES. — GRANT KEMBLE, Perpetual Guardian CEO
switched from asset-based charging to a fee-for-service model. The three-year partnership with Perpetual Guardian entitles all Federated Farmers members to discounts on many important estate planning services, along with services and advice from 40 estate planning specialists across 16 branches.
TO FIND OUT MORE Contact Brendan Reidy, Perpetual Guardian business and client advisor on 07 959 3571 or brendan.reidy@pgtrust.co.nz. ■ Whangarei, Trevor Peacock, 09 986 5873, or Paula Burgess, 09 986 5872; ■ Tauranga, Craig Roebuck, 07 928 5452; ■ Hamilton, Eileen Slater, 07 959 3573, or Bruce Jenks, 07 959 3578, or Brendan Reidy, 07 959 3571; ■ Rotorua, Angela Wharekura, 07 921 7681, or Russell Bridge, 07 921 7688;
■ Napier, Miles Edilson, 06 974 1154; ■ New Plymouth, Alison Clement, 06 968 8582; ■ Palmerston North, Bruce Manning, 06 953 6131 or Sheree Merritt, 06 953 6135, or Paul Fifield 06 953 6133, or Jeff Rayner, 06 953 6137; ■ Nelson, Mike Elson-Brown, 03 989 2903; ■ Christchurch, Clinton Tamati, 03 924 3415; ■ Timaru, Martin Reynecke, 03 956 3605; Dunedin, Sue Addison, 03 955 3771.
Perpetual Guardian CEO Grant Kemble.
PROVINCIAL SPOTLIGHT
Everyone’s an expert . . . after the fact By JAMES STEWART Manawatu Rangitikei Federated Farmers Provincial President As the seasons change, it’s time again to reflect on the year that has been, and plan for the new challenges and targets ahead. As always, we do this with a sense of optimism and enthusiasm. To sum up the last 12 months, it has been tough. While prices, apart from beef, have been nothing to write home about, farmers have also had to deal with what the climate has thrown our way. Climatic conditions have meant farmers have been faced with not only the extremes of weather systems, but also the challenges that these extremes bring, such as facial eczema at the tail end of the season. But these issues are something that most farmers, including myself, can take in our stride. Mother nature can be pretty unpredict-
ONE OF MY BIGGEST FRUSTRATIONS OF LATE HAS BEEN WITH THE SO-CALLED ‘EXPERTS’ WHO HAVE OPINIONS ON THE CURRENT DAIRY DOWNTURN. — JAMES STEWART Manawatu Rangitikei Federated Farmers Provincial President
able at times, so farmers know first hand how to be adaptive to the situation, employing resourceful strategies to keep our farms productive. We welcome advice and guidance from researchers and experts, bringing new information to hand, guided by empirical evidence pointing us in the right direction. Having the latest research, I
believe, is the key to improving our farming systems going forward, so it’s great to see the government budget indicating continued funding in this space. But not everyone’s ‘two cents’ is helpful. One of my biggest frustrations of late has been with the so-called ‘experts’ who have opinions on the current dairy downturn. As a dairy farmer I can testify
that it certainly has been hard with low cash flows; perhaps even tougher, when after a bit of a rough morning, is coming in to see media columns and comments of doom and gloom. These really get you down and make you start to wonder why we bother. The worst is when these ‘shinny shoes’ make comments saying farmers should have seen this coming, they had predicted it. Then they start telling us how many farms are going under and how much we are losing. Farmers are good listeners, and as I highlighted earlier, when good, practical evidence comes to hand, are receptive to changing farm management practices to align with the best research of the day. Just like the global financial crisis, perhaps there are some who saw the dairy downturn coming, but as a farmer it sucks that we are only hearing these messages now. Perhaps they only decided to get vocal after the fact, or maybe other ‘expert’ opinions were get-
ting media coverage, but I’m pretty sure I never had this information to hand. ‘I told you so’ is a pretty hard pill to swallow when I don’t recall being told. These messages do little to bolster farmers’ morale, who by in large are getting on with things the best they can. In times like this we see great community support, with farmers focusing on the job at hand, which is ultimately one that they love. So the crux of my message is that at the moment, a little positivity would go a long way. We need to keep positive, as agriculture has been and will be in the future, the bread and butter of the New Zealand economy. We need to remember that we are trying to set up future generations, both emotionally and economically, to maintain and build on our primary production platform. We need them to remember that the current situation is part and parcel of the farming business cycle. So let’s keep positive and look at what is coming up.