Farm Succession: How Can One Farm Support Two Families?
For many family farms, succession is not just about handing over the land. It is about handing over a lifetime of work, identity, and purpose. But one of the biggest challenges in succession planning is often the most obvious.
If the farm has only ever supported one household, how can it possibly support two or more?
As adult children return to the farm or show interest in being part of the business, families are forced to grapple with financial reality. The income, equity, and scale that sustained a single generation may not stretch far enough to meet the needs of the next.
Without clear planning and strategic thinking, this pressure can create conflict, force unplanned sales, or break up farms that took generations to build.
The Core Issue: One Farm, Multiple Futures
Most farms in Australia have traditionally operated around a single family unit. Mum and Dad worked the land, managed the finances, and raised their children within the farming lifestyle. Every dollar was used to build the business and provide for one household.
When children want to stay on the farm, the model must change. There are now two or more households to support. There may be ageing parents who still need income or housing. And there are often siblings who are not involved in the business but who still need to be treated fairly.
This is where the tension between viability and fairness becomes very real.
Start With the End in Mind
Succession is not a transaction. It is a transition. And every transition needs an end goal. It might be:
Keeping the farm intact for future generations
Creating off-farm opportunities for non-farming siblings
Helping Mum and Dad retire with financial security
Building a multi-generational business that can grow over time
Maintaining family relationships through clarity and structure
Too many families start succession planning too late. They begin with asset division instead of legacy vision. But the most successful farm transitions start with the question: what do we want this farm to be in 10, 20 or 30 years?
Diversify Early to Create Options Later
The earlier families think about diversification, the more options they have later. Relying entirely on seasonal income from a single enterprise limits flexibility. But when a farm develops alternative income sources or builds off-farm wealth, it opens doors for future generations.
Diversification might include:
Expanding into agri-tourism, contracting or value-added products
Leasing under-utilised land or infrastructure
Investing in off-farm assets like shares, property or super
Building additional income through side businesses
Developing renewable energy or conservation partnerships
These strategies do not just increase income. They also create buffers, reduce reliance on commodity cycles, and provide assets that can be used in succession without breaking up the core farming land.
Be Realistic About Financial Capacity
Before promising land or income to the next generation, families must understand whether the farm is truly capable of supporting multiple households.
Key questions include:
Is the business currently profitable and scalable
Can it fund wages, housing and lifestyle for two or more families
What are the retirement needs of the current generation
Are there outstanding debts or major capital expenditure needs
What is the plan if the farm cannot grow further
If the answer to these questions is unclear, it is time to stop, assess and plan before committing to succession steps that may not be financially viable.
What to Do When the Farm Alone Is Not Enough
Even if the farm is not large enough to support multiple families right now, there are still ways forward.
Grow the Business First
Look at increasing scale, improving productivity or expanding into new enterprises before trying to divide income or ownership.
Stage the Succession
Use a gradual transition where the next generation starts in an operational or management role before moving into equity or ownership. This allows time to build capability and profitability.
Create Off-Farm Support Structures
Use superannuation, savings or off-farm assets to support the retiring generation. This reduces pressure on the farm to fund both generations at once.
Off-Farm Equity for Siblings
Consider using insurance, off-farm investments or staged buy-outs to provide fair outcomes for siblings not involved in the farm.
Use Appropriate Structures
Trusts, companies and unit arrangements can provide flexibility and protection. These should be tailored to the family’s goals and regularly reviewed.
Legacy Is More Than Land
For many farming families, the true legacy is not just measured in hectares. It is about identity, stewardship and values. But legacy cannot be maintained without financial viability.
Handing over a farm that cannot support the next generation is not a legacy. It is a burden. Good succession planning protects both the land and the people who work it.
A well-managed transition allows future generations to thrive, not just survive.
Communication Is the Foundation
Start conversations early. When the next generation expresses interest. When retirement starts to feel closer. When major investment decisions are on the table.
Include all relevant family members. Be open about financial realities. Bring in external advisers to guide the process and ask the hard questions.
The most successful transitions happen when families talk honestly and plan with shared understanding.
Final Thoughts
If your farm has only ever supported one family, it is not safe to assume it can suddenly support two or more. But with clear goals, early diversification and honest assessment, it may be possible to create a viable future for multiple generations.
Start with the end in mind. Define what legacy means for your family. Then work backwards to build a strategy that supports it.
We help families navigate these decisions every day. The process is rarely simple. But with the right structure, strategy and advice, it can be successful.
Where We Can Help
We assist farming families with succession planning that balances financial realities and personal goals. From modelling farm profitability to structuring ownership, managing tax and supporting retirement, we help build plans that work in practice.
If you want to protect your family legacy while planning for the next generation, contact us for a confidential discussion.
Disclaimer
This article is general in nature and does not take into account your personal financial, legal or family circumstances. You should seek advice from qualified professionals before making decisions about farm succession, ownership structures or asset distribution.
