Don't sell the farm: the risk hiding in most farming wills

When a farming client’s will splits the estate equally between children, it can look like the fairest possible outcome. In practice, it is often the clause that forces a sale and starts a rift that outlasts the estate itself.

Troy Armstrong, founder and senior adviser at Larapinta Private, works on farm succession planning with families whose wealth sits mostly in land rather than listed assets. He says the instinct to treat every child the same rarely survives contact with a working property.

“A farm cannot be easily divided like a share portfolio or a bank account, and an equal split on paper can force an outcome no one in the family actually wants,” Armstrong says.

Two decades apart

The tension usually centres on a single point, Armstrong says. One child stays and works the property for decades, often on well below market pay, expecting to inherit it. The others move away, build careers and families elsewhere, and expect an equal share in cash.

By the time the will is read, those expectations are already miles apart. The child who stayed feels they have earned the farm. The ones who left feel they are owed their share. Both views are reasonable, Armstrong says, and that is what makes the disagreement hard to resolve.

“Equal is not the same as fair when one child has given their life to the land and the others have built theirs somewhere else.”

Asset-rich, cash-poor

Farming families are typically asset-rich and cash-poor. Most of what they are worth is tied up in land, stock and equipment, not in a portfolio that can be split cleanly. An equal division of the estate usually leaves one practical option: sell part or all of the property to pay out the children who left.

“No family should have to sell the ground they farm simply to settle an estate,” Armstrong says. “But that is where an equal-split will can lead, because the money to make it fair sits in the paddocks.”

Farm succession planning options that keep the farm whole

Several structuring options can keep a farm intact while still giving departing children a genuine, fair share:

• A buy-sell agreement between siblings, backed by an independent valuation, that sets out how and when a payout happens.
• A testamentary trust that separates control of the property from an equal cash entitlement.
• A life insurance policy taken out specifically to fund an equalisation payment, giving departing children a cash outcome without touching the land.
• A staged transfer of equity to the child working the property, agreed and documented well ahead of time, so the handover happens over years rather than in one hit.

While none of these remove the emotional weight of the decision, they give a family more room to negotiate than a will that simply divides the property in half.

Timing adds pressure. Australian farmers are, on average, older than most other business owners, with ABARES analysis putting the median age of farmers and farm managers in the mid-50s. A large cohort of farming families is likely to reach the succession question at roughly the same time, most of them holding wealth that is difficult to turn into cash quickly.

Armstrong says the real conflict in these estates is rarely about money on its own. “It is also about who takes over, how you keep the place whole, and how you treat the next generation fairly. Those pull in different directions, and pretending they do not is what causes the damage.”

Plan the handover before the funeral

“You can keep the farm whole and still look after the children who left,” Armstrong says. “But only if you plan it years out, not in the weeks after a funeral.”

Regional succession clients often fall between two stools. City-based wealth practices typically build their work around portfolios, superannuation and the family home, with advice cycles that assume liquid assets and quarterly reviews.

Local accountants may have advised the same family for decades but rarely set themselves up to handle ownership structuring, equalisation funding and family negotiation as a single package. Farming clients need farm succession planning that covers all three, and few advice models deliver it together.

An “equal” clause in a farming client’s will is worth flagging early, before it hardens into the only plan the family has. The families who avoid a forced sale are the ones who work through ownership years before anyone is standing at a funeral trying to figure out what happens next.