Rob Brown - Peppin Planners.ppt - NSW Irrigators Brown - Peppin Planners.pdf · Are thddiffhere...

Succession:Succession:Is there a female perspective?Is there a female perspective?Is there a need for a better way??Is there a need for a better way??It’s all in our heads It’s all in our heads –– lessons from brain sciencelessons from brain scienceHow to make it go rightHow to make it go rightg gg gHow to integrate business plans and family How to integrate business plans and family relationships relationships

Sept/Oct 2009Sept/Oct 2009 Rob Brown, Peppin Planners Deniliquin for Rob Brown, Peppin Planners Deniliquin for NSWIC NSWIC -- Young Farmers WorkshopYoung Farmers Workshop

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St ti ith YSt ti ith YStarting with YouStarting with You

Quick Assessment Quick Assessment Your TimelineYour TimelineWhat do you want to know?What do you want to know?What do you want to know?What do you want to know?Is there a female view about Is there a female view about succession?succession?


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h d diffh d diffAre there gender differences?Are there gender differences?

Roles vary enormously; farm operator, financial controller, Roles vary enormously; farm operator, financial controller, strategist, HR, partner, mother, inlaw, career, off farm income strategist, HR, partner, mother, inlaw, career, off farm income etc (Is this the same as blokes? Is there similar recognition?)etc (Is this the same as blokes? Is there similar recognition?)etc (Is this the same as blokes? Is there similar recognition?)etc (Is this the same as blokes? Is there similar recognition?)

BUT….BUT….Brain research Brain research –– women wired for extended relationships and women wired for extended relationships and scanning* (more later)scanning* (more later)scanning* (more later)scanning* (more later)Family ties: “nurturer and protector” for children and Family ties: “nurturer and protector” for children and grandchildren. (Lioness syndrome)grandchildren. (Lioness syndrome)In successionIn succession more often the initiator AND the person whomore often the initiator AND the person whoIn succession In succession -- more often the initiator AND the person who more often the initiator AND the person who keeps the discussions progressing!keeps the discussions progressing!Longevity: will outlive blokesLongevity: will outlive blokesOver 50 more likely to initiate divorceOver 50 more likely to initiate divorceOver 50, more likely to initiate divorceOver 50, more likely to initiate divorce

* L Brizendine, The Female Brain* L Brizendine, The Female Brain


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It’s time for a 21It’s time for a 21stst Century ModelCentury ModelIt s time for a 21It s time for a 21 Century Model Century Model for all families…..for all families…..

How many will happen to all your family…How many will happen to all your family…Divorce Divorce –– 50% 50% --including parents! And blended families!including parents! And blended families!

Long term disability Long term disability ––about 1 in 20. Frequently parents end up as the carers.about 1 in 20. Frequently parents end up as the carers.

Parents helping children financially Parents helping children financially –– gifts and loans to get started or get out of gifts and loans to get started or get out of trouble. And grandchildren or great grandchildren.trouble. And grandchildren or great grandchildren.

Age care Age care -- 30% males, 50% females (3mths to 10 years!)30% males, 50% females (3mths to 10 years!)

Children helping parents Children helping parents –– too much life at the end of the money! too much life at the end of the money!

Power of Attorney and GuardianshipPower of Attorney and GuardianshipPower of Attorney and GuardianshipPower of Attorney and Guardianship

Wills and Estates. All families will deal with their parents Wills and Wealth Wills and Estates. All families will deal with their parents Wills and Wealth Transfer. Transfer.

M t f ili ill b i d t l d T ill h hi h i k fM t f ili ill b i d t l d T ill h hi h i k fMost families will be inadequately prepared. Too many will have high risk of Most families will be inadequately prepared. Too many will have high risk of damage to relationships. damage to relationships.

Succession is additional to the above.Succession is additional to the above.


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Household Wealth RisingHousehold Wealth RisingHousehold Wealth Rising Household Wealth Rising and more at stakeand more at stake

90th $ 1 046 853Farm business: asset rich, not always income rich$

80th $ 693 25570th $ 517 559

always income rich.

Changing climate, technology and prices70th $ 517 559

60th $ 400 47550th $ 311 520

A career for the rapid adaptors and comfortable with risk?

BUT living much much longer!50th $ 311 52040th $ 230 23930th $ 150 131

BUT living much much longer! 50% to 100 years of age!

Much more family interdependence 30th $ 150 13120th $ 66 38810 h $ 23 23

and interaction


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10th $ 23 235

Wh th f t hitWh th f t hitWhen the fan gets hit….When the fan gets hit….

•• Who holds it together?Who holds it together?•• Who holds them together?Who holds them together?•• Who keeps the ball rolling?Who keeps the ball rolling?Who keeps the ball rolling?Who keeps the ball rolling?

A it i t tlA it i t tl•• As it importantlyAs it importantly-- Why does it go so badly? Why does it go so badly? -- And how and why most families are And how and why most families are

unprepared?unprepared?


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O tiO tiOnce upon a time…Once upon a time…Timeline….Timeline….

Son & DIL + 4

J iInherit Farm after 30 yrs

children - $600k farm & new house house $200k GoodJoin

parents Farm as

after 30 yrs as employee

Son on share-

house, $200k debt.

Parents $3m. Nil

Good Plan?

20 yr olds

1955

Son joins farm1985

farming deal (15%)1991

debt. $500k off farm assets20011955 1985

48,4918,15,11

199154,5524,21,17

200164,6534,31,27


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, , , ,

T ftT ftToo often…………Too often…………

BEFOREBEFOREWe’re fine. We all get on. We’ve plenty of We’re fine. We all get on. We’ve plenty of time. Wrong time (wait till it gets better)time. Wrong time (wait till it gets better)

AFTERAFTERI just can’t believe this is happening to usI just can’t believe this is happening to usI just can t believe this is happening to us. I just can t believe this is happening to us. And sometimes And sometimes –– worst years of my lifeworst years of my life

Let’s look at the facts And then the feelings!Let’s look at the facts And then the feelings!Sept/Oct 2009Sept/Oct 2009 Rob Brown, Peppin Planners Deniliquin for Rob Brown, Peppin Planners Deniliquin for

NSWIC NSWIC -- Young Farmers WorkshopYoung Farmers Workshop88

E d bl dE d bl dEveryday blundersEveryday blunders

Uncommercial arrangements create poor mindsetUncommercial arrangements create poor mindset

–– Artificial arrangements “shelter” younger generation. Hide or distorted Artificial arrangements “shelter” younger generation. Hide or distorted understanding of profit, debt, losses risk.understanding of profit, debt, losses risk.

–– Mindset difficult to change. Hard to admit misunderstanding!Mindset difficult to change. Hard to admit misunderstanding!

Feeling of failure frustration let down by parents or the worldFeeling of failure frustration let down by parents or the world–– Feeling of failure, frustration, let down by parents or the world.Feeling of failure, frustration, let down by parents or the world.

No clear plan or expectations;No clear plan or expectations;

–– Mixed up messages: over or under promising.Mixed up messages: over or under promising.Mixed up messages: over or under promising.Mixed up messages: over or under promising.

–– Parents often unprepared for own priorities as they age: debt free, Parents often unprepared for own priorities as they age: debt free, secure retirement, help other children.secure retirement, help other children.

–– What if more than one returns, What if more than one returns,

–– What do off farm children expect (deep down)What do off farm children expect (deep down)


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Every day blunders continuedEvery day blunders continued

Rarely in writing. Everyone has their own version.Rarely in writing. Everyone has their own version.

The longer it goes for, the more time at stake and The longer it goes for, the more time at stake and the higher the risk of conflicting expectations!!!the higher the risk of conflicting expectations!!!No business exit terms No business exit terms –– need to negotiate in middle of need to negotiate in middle of emotional turbulence emotional turbulence

What happens if both die What happens if both die -- wills left assets equally!wills left assets equally!

Parents Generosity backfires hurtfullyParents Generosity backfires hurtfully

Hurt escalates emotions. Hurt escalates emotions.


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3 P t f N kt PC3 P t f N kt PC3 Parts of our Necktop PC3 Parts of our Necktop PC

Cave Brain -(Mega PC)

Top Brain -(C i ) (Mega PC)

Our Surveillance, Librarian & Self-

(Consciousness) talking, judging, deciding. Left

B i St

Librarian & Self-defence System

5F’s- Feed & Fornicate,

creative. Right Analytical

Brain Stem -(lizard brain) controls basic functions -

,Flee, Fight or Freeze.

Triggers memories & ibasic functions

breathing, heat rate, temperature

emotions


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What we know about feelingsWhat we know about feelingsWhat we know about feelings What we know about feelings from Brain Science (Neurology)from Brain Science (Neurology)

How we know: Brain ImagingHow we know: Brain Imaging

Brain developed form 3 billion years of natural selection.Brain developed form 3 billion years of natural selection.Brain developed form 3 billion years of natural selection. Brain developed form 3 billion years of natural selection.

Cavebrain operates up to ½ a second ahead of awareness.Cavebrain operates up to ½ a second ahead of awareness.

Hard wired to “deal” with threats approach food sexHard wired to “deal” with threats approach food sexHard wired to deal with threats, approach food, sex.Hard wired to deal with threats, approach food, sex.

Automatic responses quick and ensure survivalAutomatic responses quick and ensure survival

Interpreter to make sense of everything (but jumps toInterpreter to make sense of everything (but jumps toInterpreter to make sense of everything (but jumps to Interpreter to make sense of everything (but jumps to conclusions)conclusions)

BUT not so good in business and when dealing with hurt.BUT not so good in business and when dealing with hurt.


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H i thi k ?H i thi k ?How is this known?How is this known?

Psychology research + imaging (the new microscope)Psychology research + imaging (the new microscope)Examples:Examples:Examples:Examples:–– DisneylandDisneyland–– The rail switch dilemmaThe rail switch dilemma -- rationale and emotionalrationale and emotionalThe rail switch dilemma The rail switch dilemma rationale and emotional rationale and emotional

decisions made in different areasdecisions made in different areas–– Silent Auction and Unconscious AnchoringSilent Auction and Unconscious Anchoringgg–– The Suspension bridge (fear vs exhilaration)The Suspension bridge (fear vs exhilaration)–– The Sublimable photos (familiarity bias or anger)The Sublimable photos (familiarity bias or anger)The Sublimable photos (familiarity bias or anger)The Sublimable photos (familiarity bias or anger)–– Children & size of amygdala Children & size of amygdala -- ( threat/anger ( threat/anger

surveillance centre)surveillance centre)Sept/Oct 2009Sept/Oct 2009 Rob Brown, Peppin Planners Deniliquin for Rob Brown, Peppin Planners Deniliquin for


))

We think we are logical!We think we are logical!

Something happens (e.g. drought, rudeness)Something happens (e.g. drought, rudeness)We evaluate what’s happeningWe evaluate what’s happeningWe evaluate what s happening We evaluate what s happening We decide how to respondWe decide how to respondW thi k f li d l i l ( tl )W thi k f li d l i l ( tl )We think our feelings and responses are logical (mostly). We think our feelings and responses are logical (mostly). We believe ourselves (mostly)We believe ourselves (mostly)

B t th tB t th tBut others are not….But others are not….We “attribute” intent to others We “attribute” intent to others –– we “know”we “know”We think other people illogical (and sometimes blame)We think other people illogical (and sometimes blame)


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B t h t ll hB t h t ll hBut what really happens...But what really happens...

Subconscious Surveillance by our cave brain/mega PC Subconscious Surveillance by our cave brain/mega PC Our “librarian” checks memory bank for threat = toxic baggage. Our “librarian” checks memory bank for threat = toxic baggage. OR for reward OR for reward –– food, relations, sex.food, relations, sex.Rapid pre conscious priming to brain and body of hormones Rapid pre conscious priming to brain and body of hormones -- e.g. e.g. adrenalineadrenalineadrenaline. adrenaline. We rationalise the feeling. If feeling good, complacent. If feeling We rationalise the feeling. If feeling good, complacent. If feeling bad bad –– freeze, flee, fight. Jump to conclusions. freeze, flee, fight. Jump to conclusions. We attribute good or bad motive and intent to others. The We attribute good or bad motive and intent to others. The b$^$#^$ meant to do it! b$^$#^$ meant to do it!

B b ild T h d b k t tB b ild T h d b k t tBaggage builds up. Too hard basket or get worse.Baggage builds up. Too hard basket or get worse.

Good families in shock, hurt with horrible outcomes.Good families in shock, hurt with horrible outcomes.


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Most family interactionsMost family interactionsMost family interactions Most family interactions are emotional territoryare emotional territoryFamilies Unprepared emotionally and/or financially:Families Unprepared emotionally and/or financially:–– Standard Family EventsStandard Family Eventsyy

–– Business difficulties, direction/riskBusiness difficulties, direction/risk

–– SuccessionSuccession

–– Financially Financially –– mix of generosity and self interestmix of generosity and self interest

Emotions easily triggered (buttons pressed)Emotions easily triggered (buttons pressed)y gg ( p )y gg ( p )–– Sensitive to hurt from own familySensitive to hurt from own family

–– Piggy backs on normal family emotional historyPiggy backs on normal family emotional historyggy y yggy y y

–– Easy to move into destructive cycleEasy to move into destructive cycle

–– Costly emotionally and financiallyCostly emotionally and financially


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Most business decisions areMost business decisions areMost business decisions are Most business decisions are also emotional territory also emotional territory

Why are great opportunities missed? Why are great opportunities missed? Vital to be aware of how emotions distort decisions (self concept)Vital to be aware of how emotions distort decisions (self concept)Negative FeelingsNegative Feelings

Fight, flee or freezeFight, flee or freezeAll or nothing or black and white thinkingAll or nothing or black and white thinking dramatisation and over generalisation (e gdramatisation and over generalisation (e gAll or nothing or black and white thinking All or nothing or black and white thinking -- dramatisation and over generalisation (e.g. dramatisation and over generalisation (e.g. drought and water regulation)drought and water regulation)Creativity dampened or lost Creativity dampened or lost -- Straight line (no creativity)Straight line (no creativity)

l d f ll d f lOr overly Good feelings Or overly Good feelings -- positive brain modulators flood brain and distorts positive brain modulators flood brain and distorts thoughts so surveillance system drops out. Can be blinded to threats or feeling thoughts so surveillance system drops out. Can be blinded to threats or feeling unbeatable!unbeatable!

e.g. frequent examples of experts being killed by known risk taking!e.g. frequent examples of experts being killed by known risk taking!and boom and bust cycles (embedded optimism or pessimism)and boom and bust cycles (embedded optimism or pessimism)

Scenario Testing Keeps us honestScenario Testing Keeps us honest


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Scenario Testing Keeps us honestScenario Testing Keeps us honest

Farm business models are hugely Farm business models are hugely different!different!–– but most people think they are similarbut most people think they are similar

FBM as % of Land and fixed improvement

20%

25%

30%

ovem

ent

10%

15%

20%

fixe

d im

pro

Top 25%

Midlle 50%

Bottom 25%

-5%

0%

5%

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006of

land

and

Bottom 25%

-10%

1 1 1 1 1 1 1 1 1 1 1 2 2 2 2

Year

%


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h i bh i bThere is a better way….There is a better way….

Our Planning framework Our Planning framework -- Four dimensions…..Four dimensions…..

1.1. People People –– family and support networkfamily and support network

22 SafeguardsSafeguards to protect your businessto protect your business2.2. Safeguards Safeguards –– to protect your businessto protect your business

3.3. Targets Targets –– your directionyour direction

4.4. Strategies Strategies ––to get thereto get there


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People: Mi d t R l ti hi & C itMindset, Relationships & Capacity

Individuals' Sense of Control and Direction

Mindset & Thought Management for better decisions & Interactions

Family Affinity Strength and Practicesy y g

Family Alignment & Expectations - Safeguards, Targets andFamily Alignment & Expectations Safeguards, Targets and Strategies)


2020Knowledge Team:Family, Advisers, Contacts and Planning Budget

People: Good FamilyPeople: Good FamilyPeople: Good Family People: Good Family Relationship PracticesRelationship Practices

Affinity: respect and protect family Affinity: respect and protect family closeness:closeness:closeness: closeness: –– invest in good interactions and limit toxic ones invest in good interactions and limit toxic ones

(be wary of cave brain reflexes and hi(be wary of cave brain reflexes and hi--jacking!)jacking!)(be wary of cave brain reflexes and hi(be wary of cave brain reflexes and hi jacking!)jacking!)–– Small Talk builds “trust” bank accounts! Small Talk builds “trust” bank accounts! –– Express Appreciation What has been achievedExpress Appreciation What has been achievedExpress Appreciation. What has been achieved.Express Appreciation. What has been achieved.–– Respect feelings, control reactionsRespect feelings, control reactions–– Learn to use best conflict response styleLearn to use best conflict response style–– Learn to use best conflict response styleLearn to use best conflict response style–– Family wealth Transfer mostly “generosity!” A Family wealth Transfer mostly “generosity!” A

better deal than anywhere else!better deal than anywhere else!Sept/Oct 2009Sept/Oct 2009 Rob Brown, Peppin Planners Deniliquin for Rob Brown, Peppin Planners Deniliquin for


better deal than anywhere else!better deal than anywhere else!

And when negotiating And when negotiating d e egot at gd e egot at gfamily deals…. family deals….

Use the framework….People FirstUse the framework….People FirstP i t P ti AND C i t St t t d thP i t P ti AND C i t St t t d thPersistence, Patience AND Consistency. Stop start sends the Persistence, Patience AND Consistency. Stop start sends the wrong message.wrong message.

Build affinity skills & make regular deposits in the trust bankBuild affinity skills & make regular deposits in the trust bankBuild affinity skills & make regular deposits in the trust bank Build affinity skills & make regular deposits in the trust bank accountaccount

The 3 R’sThe 3 R’s -- Respect, respect and respect. Practice safe andRespect, respect and respect. Practice safe andThe 3 R s The 3 R s Respect, respect and respect. Practice safe and Respect, respect and respect. Practice safe and friendly discussionsfriendly discussions

Promote inclusiveness and confidentialityPromote inclusiveness and confidentialityyy

If hit a block, be check in. Firm but not emotional and get If hit a block, be check in. Firm but not emotional and get communication advice. Might need a 3communication advice. Might need a 3rdrd party circuit breaker.party circuit breaker.

10/27/200910/27/2009Limit hurt and mend if hurt happens! Don’t escalate!Limit hurt and mend if hurt happens! Don’t escalate!

Family Arrangements and AgreementsFamily Arrangements and Agreements --Family Arrangements and Agreements Family Arrangements and Agreements --What should they cover?What should they cover?

All about maximising family alignment.All about maximising family alignment.If it’s not written down, it’s not worth writing down!If it’s not written down, it’s not worth writing down!If it s not written down, it s not worth writing down! If it s not written down, it s not worth writing down! (bad business practice)(bad business practice)Start softly with a gap analysis: what’s missing inStart softly with a gap analysis: what’s missing inStart softly with a gap analysis: what s missing in Start softly with a gap analysis: what s missing in your plans your plans –– safeguards, targets, strategies.safeguards, targets, strategies.Four levels of records Four levels of records –– all better than nothingall better than nothing–– Discussion notes Discussion notes –– reduces memory distortion!reduces memory distortion!–– Non binding agreement (evidence)Non binding agreement (evidence)–– Family Deed Family Deed -- commitmentcommitment–– Contract Contract -- Legally EnforceableLegally Enforceable


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d li f dd li f dAnd Alignment on SafeguardsAnd Alignment on Safeguards

Record keeping Systems & UpdatesRecord keeping Systems & Updates-- criticalcriticalFi i l B ff d W t i 'Fi i l B ff d W t i 'Financial Buffers and Worst case scenario'sFinancial Buffers and Worst case scenario'sEstates Estates –– Understood and Felt Understood and Felt –– “what ever you want Mum and Dad”“what ever you want Mum and Dad”–– I’m fine I’m fine –– just look after yourselfjust look after yourself

B i d t t t l !B i d t t t l !–– Beware inadequate estate plans!Beware inadequate estate plans!Disability and Life InsuranceDisability and Life InsuranceLongevity and Age CareLongevity and Age CareAsset Protection Asset Protection


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Estate PlansEstate Plans -- whatwhatEstate Plans Estate Plans what what needs to be covered?needs to be covered?What happens when both parents die?What happens when both parents die?A oid ill challengeA oid ill challengeAvoid will challengeAvoid will challengeWhat happens if children die? (insurance cover cheap)What happens if children die? (insurance cover cheap)Estate plans must incorporate structures and assets Estate plans must incorporate structures and assets held outside of personal ownership held outside of personal ownership –– self managed self managed

f d f il t t tf d f il t t tsuper funds, family trusts etc.super funds, family trusts etc.Avoid unintended asset loss (two step)Avoid unintended asset loss (two step)Ensure “inEnsure “in--laws” can separatelaws” can separateParticularly blended familiesParticularly blended families


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Divorce RiskDivorce Risk –– a life time risk toa life time risk toDivorce Risk Divorce Risk a life time risk to a life time risk to both generations!both generations!

% of Divorces for years since i t ti fmarriage to separation Males Females Average Ratio of 30+

0-5 24% 11% 18% 2.55 9 21% 24% 23% 3 25-9 21% 24% 23% 3.210-19 27% 31% 29% 4.120 29 14% 19% 17% 2 420-29 14% 19% 17% 2.430 and over 5% 9% 7% 1Ignores marriages after age 40Ignores marriages after age 40

And increasingly single elderly “partnering” up


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il i dil i dFamily Agreement ContinuedFamily Agreement Continued

Disability, Divorce Dispute and Exit Disability, Divorce Dispute and Exit Terms.Terms.–– More likely to stay in if can get outMore likely to stay in if can get out–– More likely to stay in if can get out. More likely to stay in if can get out. –– More likely to fight if trapped in!More likely to fight if trapped in!–– Best to have fallback exit terms to limit Best to have fallback exit terms to limit

dispute severity and duration dispute severity and duration p yp y


2727

C li TC li TCovers alignment on TargetsCovers alignment on Targets

Regularly checking targets: improves family expectations and Regularly checking targets: improves family expectations and mental preparation!mental preparation!Easy to miss key targets or selfEasy to miss key targets or self--delude delude -- “Control”, retirement “Control”, retirement and sense of self worth, Debt and sense of failureand sense of self worth, Debt and sense of failureHow to create clear ExpectationsHow to create clear Expectations only 3 possible responsesonly 3 possible responsesHow to create clear Expectations How to create clear Expectations –– only 3 possible responsesonly 3 possible responses–– Certainty Certainty -- this is set in concretethis is set in concrete–– PossibilityPossibility -- This is what we would like but we might changeThis is what we would like but we might changePossibility Possibility This is what we would like but we might change This is what we would like but we might change

our mindour mind–– No idea, No promises. No assurances!No idea, No promises. No assurances!

Means all families clear Means all families clear –– even if clear that that not clear.even if clear that that not clear.Bottom line: don’t foster expectations you can’t deliver or would Bottom line: don’t foster expectations you can’t deliver or would not be able to sleep with!not be able to sleep with!


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pp

Specifics of Parents Targets andSpecifics of Parents Targets andSpecifics of Parents Targets and Specifics of Parents Targets and Boundaries to be covered in an agreementBoundaries to be covered in an agreement

The assets they want to protectThe assets they want to protectTh t th illi t l i t tTh t th illi t l i t tThe assets they are willing to loan, give or put at The assets they are willing to loan, give or put at riskriskThe assets growth and income they are seeking toThe assets growth and income they are seeking toThe assets growth and income they are seeking to The assets growth and income they are seeking to achieveachieveDebt Triggers to pull out of deal with childrenDebt Triggers to pull out of deal with childrenDebt Triggers to pull out of deal with childrenDebt Triggers to pull out of deal with childrenPlans for Wealth Transfer Plans for Wealth Transfer –– on and off farm family on and off farm family members. Early inheritance vs later onemembers. Early inheritance vs later onemembers. Early inheritance vs later onemembers. Early inheritance vs later oneParents getting older Parents getting older -- what provisions?what provisions?


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Wh t b t St t i ?Wh t b t St t i ?What about Strategies?What about Strategies?Lack of integrated planningLack of integrated planningRules do keep changing. Get over it.Rules do keep changing. Get over it.Can be hard to find advisers “across” the issues OR sufficiently Can be hard to find advisers “across” the issues OR sufficiently specialised. specialised. Find advisers who give options and do not decide for you!Find advisers who give options and do not decide for you!Find advisers who give options and do not decide for you!Find advisers who give options and do not decide for you!Time poor Advisers too often give “culled down” advice and options Time poor Advisers too often give “culled down” advice and options to fit your understanding, their time and their values.to fit your understanding, their time and their values.Four Key Strategy Checks:Four Key Strategy Checks:–– Is it legal/reliable?Is it legal/reliable?–– Do the numbers justify the hassle and cost?Do the numbers justify the hassle and cost?Do the numbers justify the hassle and cost?Do the numbers justify the hassle and cost?–– Does it fit with the rest of my plans?Does it fit with the rest of my plans?–– Does it feel right? Does it feel right?


3030

St t i E lSt t i E lStrategies ExamplesStrategies ExamplesEarnings:Earnings:–– what are your knowns? what are your knowns? –– living, finance, asset quality maintenance, tax, living, finance, asset quality maintenance, tax,

kkworkersworkers–– What are outcomes for 4 profit scenarios: Great, OK, poor and shockerWhat are outcomes for 4 profit scenarios: Great, OK, poor and shocker–– Vital to be on the same pageVital to be on the same page

Assets: e.g. water and plantAssets: e.g. water and plantTax examples: nil, 15%, 30% and higher. What are your strategiesTax examples: nil, 15%, 30% and higher. What are your strategiesEC Age pension Age CareEC Age pension Age CareEC, Age pension, Age CareEC, Age pension, Age CareFour Key Strategy Checks:Four Key Strategy Checks:–– Is it legal/reliable?Is it legal/reliable?–– Do the numbers justify the hassle and cost?Do the numbers justify the hassle and cost?–– Does it fit with the rest of my plans?Does it fit with the rest of my plans?–– Does it feel right?Does it feel right?


3131

Does it feel right? Does it feel right?

fi d i ifi d i iProfit and Business StrategiesProfit and Business Strategies

Deal needs to cover 3 key profit scenario’s:Deal needs to cover 3 key profit scenario’s:–– Better than expectedBetter than expected–– Worse than expectedWorse than expected–– Same as expectedSame as expected

Business PlansBusiness Plans–– Business Direction Business Direction -- scale, practicesscale, practices

b b db b d–– Contribution by parents and younger generationContribution by parents and younger generation–– Workload, Holidays, Time off and responsibilitiesWorkload, Holidays, Time off and responsibilities

Decision protocolsDecision protocols unilateral majority unanimousunilateral majority unanimous–– Decision protocols Decision protocols –– unilateral, majority, unanimousunilateral, majority, unanimous–– Drawings Drawings -- what are they, are they out of profit or before what are they, are they out of profit or before

profitprofit


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p o tp o t

d b id b iAsset and Debt strategies Asset and Debt strategies

Assets and Debt PlansAssets and Debt Plans–– Assets:Assets:

purchase of new assets,purchase of new assets,p ,p ,options or promises for existing assets. options or promises for existing assets. Ability to sell assetsAbility to sell assetsyy

–– Debts:Debts:Ability to borrow to purchase of new assetsAbility to borrow to purchase of new assetsAbility to borrow to purchase of new assetsAbility to borrow to purchase of new assetsGuarantees and use of securityGuarantees and use of security


3333

The Younger Generations DealThe Younger Generations DealThe Younger Generations DealThe Younger Generations Deal

Remuneration Remuneration ––fully paid, fully paid, deferreddeferred/sweat /sweat equity LSL profit sharing??equity LSL profit sharing?? Tax packagingTax packagingequity, LSL, profit sharing??equity, LSL, profit sharing?? Tax packagingTax packagingShare of capital gains or losses (equity or Share of capital gains or losses (equity or inheritance at stake)inheritance at stake)inheritance at stake)inheritance at stake)Option or requirement to support or buy out Option or requirement to support or buy out

bl hbl hparents or siblings inheritanceparents or siblings inheritanceComparison with commercial (needs to be = or Comparison with commercial (needs to be = or better)better)


3434

l l il l iA Complete Planning ProcessA Complete Planning Process

Alignment: Everyone on the same Alignment: Everyone on the same A d itt d !A d itt d !page. And written down!page. And written down!

Understand importance of emotional Understand importance of emotional ppintelligence, family affinity and intelligence, family affinity and expectationsexpectationsppSafeguards in placeSafeguards in placeTargets are clear and up to dateTargets are clear and up to dateTargets are clear and up to date.Targets are clear and up to date.Strategies are clear and up to dateStrategies are clear and up to date


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A Q ti ?A Q ti ?Any Questions?Any Questions?

Please rePlease re--assess your feelings about your assess your feelings about your own plansown plans


3636

Has this workshop beenHas this workshop beenHas this workshop been Has this workshop been useful…useful…

1.1. Timeline and Example case studyTimeline and Example case study2.2. Why we urgently need a 21Why we urgently need a 21stst century approach to Family century approach to Family y g yy g y y pp yy pp y

planning and for succession too! planning and for succession too! 3.3. How it goes wrong & Why it happens so often. Why brain How it goes wrong & Why it happens so often. Why brain

i i i t t F li F t Mi i i t t F li F t Mscience is so, so important: Feelings are Facts. Manage science is so, so important: Feelings are Facts. Manage them or miss out! Advise frameworks deficient.them or miss out! Advise frameworks deficient.

44 What to do about it & How it goes right People SafeguardsWhat to do about it & How it goes right People Safeguards4.4. What to do about it & How it goes right. People, Safeguards, What to do about it & How it goes right. People, Safeguards, Targets and StrategiesTargets and Strategies

5.5. How to integrate business plans and family relationshipsHow to integrate business plans and family relationships6.6. What’s in a good family business planWhat’s in a good family business plan7.7. How to go about planningHow to go about planning


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And your feedback welcome!And your feedback welcome!


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Rob Brown - Peppin Planners.ppt - NSW Irrigators Brown - Peppin Planners.pdf · Are thddiffhere...

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