Don’t become paralyzed by all the uncertainty around farm taxes and fail to get your transition and succession plan done.
There are worse uncertainties created by unexpected life and farm changes that many farmers haven’t prepared for than there are with tax changes, said farm family life coach Elaine Froese.
“Do you have a will? A power-of-attorney?” said Froese, a Boissevain farmer and farm adviser who specializes in intergenerational farm transitions.
“Your financial plan and your tax plan for transition is only one small piece. What’s your communications plan? What’s your conflict resolution strategy? What’s your plan for lifestyle?
“Don’t let what the government is doing with tax grind your planning to a halt.”
Uncertainty and anxiety have struck many farm families since the federal government announced changes to farm taxes that many have feared could badly damage farm succession plans and discourage parents from passing their farms on to their children.
The government recently dropped the most contentious part of the reform package after a tsunami of outrage from farmers and other small businesspeople smashed into the Liberal attempt to eliminate tax loopholes. However, some of the proposed changes are going forward.
Tax experts have said whatever the government finally passes, the actual impact for farm families won’t be known for years because it will take Canada Revenue Agency audits and court cases to establish how the rules and regulations apply to farms in the real world.
Froese said that uncertainty is unlikely to frazzle many farmers, but male farmers are likely to be the most frazzled.
“The tax piece, for men especially, is highly disproportionate to the impact of what’s really important.”
Meanwhile, a generation of farmers is growing older and needs to sort out how the farm is going to be dealt with in the case of retirement, death or illness.
Delaying planning because of the confusion will set up a farm for worse confusion if something caused succession issues to be dealt withd unexpectedly, she said.