Easing into retirement
THE HALLYBURTONS
| Who: | Neville and Sally Hallyburton |
|---|---|
| Where: | South-west Victoria |
| What: | 550 cow herd |
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- Succession planning
- Getting help with planning
- Retirement income
- Estate planning
In this story
Neville Hallyburton plans to work on his dairy farm as long as he remains fit and healthy but it hasn’t stopped the family developing a succession plan for the business.
Neville and his wife Sally raised their three sons on their dairy farm at Jancourt East in South West Victoria. He’s a fitter and turner by trade and Sally was a nurse so they encouraged their children to start their working lives with an apprenticeship or further training.
“We wanted to offer our children the opportunity for a dairy farming career but we didn’t want to push them into it,“ Neville said.
A couple of years ago, two of the boys, Chris and Sam, returned to work full time on the farm. The 550 cow herd, Coonara Holsteins, is milked in a 60 unit rotary, with help from three part time milking staff.
When the boys joined the dairy business Neville and Sally were approaching their fifties, but they started thinking about a succession plan
“We’ve taken some initial steps in the succession planning process but it will take a number of years to evolve. We are lucky that our accountant is experienced in this area and makes sure we review our plans regularly,” he said.
Seek professional advice
Professional advisers can provide relevant information and may raise options and ideas that have not have been considered.
As a minimum, it is important to involve a trusted accountant, solicitor and financial planner. Many businesses find a meeting facilitator to be valuable.
Implementing effective change
The Hallyburton’s expect the process to involve several steps over time, with major adjustments at various business milestones such as capital purchases or family milestones such as marriages. The steps include:
- Chris and Sam working for the farm business on a commercial wage.
- Chris and Sam progressively taking over more responsibilities for the farm business, with Neville and Sally reducing their workload.
- Chris and Sam gaining equity in the business, possibly by purchasing land, stock, equipment etc.
- Neville and Sally setting up their wills to provide clarity about division of assets between the three brothers.
- Retirement planning for Neville and Sally.
Neville and Sally’s goal is to be fair to their three sons, although this may not mean equality at every stage. They recognise the plan needs to provide them with a retirement income and have the flexibility to enable the business to cope with unexpected events.
At this stage, the family has made significant progress through steps one and two and had early discussions about steps three, four and five.
“Right from the start, we put the boys on commercial wages with a productivity incentive. They needed to be rewarded fairly for their contribution, and to have the opportunity to save and build their assets,“ Neville said.
The process of handing over responsibilities has been gradual, but has now reached the point where Neville describes himself as mostly an assistant but sometimes a manager.
As herd manager Chris is responsible for animal husbandry and milk harvesting activities for the 600 cows.
“Chris has worked on the farm for four years. He always loved cows, and has an advanced diploma in agriculture. He very much runs that side of the business and I help out when needed.“
Sally milks a couple of times a week but Neville doesn’t milk very often. He describes himself as ‘more of a machinery and pasture man’.
Before coming home to the farm, Sam qualified as a fitter and turner and is now responsible for pastures and machinery, with assistance from Neville.
Over time, Neville expects the boys will need to undertake further training from time to time.
“They are both well qualified but you never stop learning and there will be times when the direction we want to take the farm business may require new skills.“
First on the list is for one of both the boys to get a truck licence.
“At the moment I take all the stock to sale, cart the gravel and shift hay, as I’m the only one with a truck licence.
At this stage, Neville still looks after farm business matters, but key decisions are always subject to plenty of discussion over the kitchen table.
The family consults with their accountant before making major purchases.
Neville and Sally have set up a superannuation fund which recently purchased a block of land for lease to the dairy business. “Our accountant has encouraged us to plan ahead for our retirement income. When we do eventually retire, the lease payments will provide us with a small income. It might not be enough to support a comfortable lifestyle but it is a first step.”
Work life balance
The boys’ involvement on the farm has enabled Sally and Neville to lighten their workloads and take more time off, including an overseas holiday in 2011.
Neville and Sam have bought a boat together and have regular fishing trips. Neville has also been able to volunteer more time with the Country Fire Authority.
Sally is enjoying more time off, thanks to the installation of automatic calf feeders.
The family aims to arrange work schedules so that everyone has regular time off. The work schedule is organised to fit in around the boys’ sport and leisure activities.
“And we encourage them each to take an annual holiday, away from the farm. If you want a long career in dairy farming it’s essential to take regular time off. It’s easy to get burnt out,” Mr Hallyburton said.