Tensions rife as farm futures go on the line
Tension between murder victim Scott Guy and the man cleared of killing him, Ewen Macdonald, stemmed from the management of the Feilding family farm they both wanted to own part of one day.
Those tensions were at the centre of the four-week trial that ended in Macdonald being acquitted last week of his brother-in-law's murder.
During the trial, the court heard how Macdonald admitted to burning down an old homestead on Scott and his wife Kylee's property, and vandalising their new home, acts the Crown said were part of a campaign to drive them off the farm.
While their case is unique, conflict surrounding farm succession is not.
Parents were often torn when it came to passing on the farm, and sometimes they over-stretched themselves to help all their children, and everyone lost, Federated Farmers president Bruce Wills said. It was a reason family farms were becoming less common.
Farms were unique because children had an investment in the business and the land, where they had often grown up, as had their parents and grandparents.
Farmers could be asset rich but cash poor, Wills said, so that when assets were highly valuable, people couldn't agree how they should be managed and legal battles ensued.
There have been numerous court cases involving farms, including an eight-year dispute that went to the Supreme Court that involved the patriarch and five children from Canterbury's prominent Kain family, who claimed they were being unfairly denied the benefits of a $70 million fortune.
A Dunsandel farmer sold his farm after killing his wife, and was sued by her parents for part of the profits, while a 14-year-old boy convicted of manslaughter after shooting his father made a claim for part of his $2 million fortune, contested by an aunt and uncle.
Macdonald started working on the Guy farm when he was 16, and eventually landed a management role. After returning to Feilding with his new wife in 2003, Guy also took on a management role.
The court heard Macdonald would complain about Guy not pulling his weight. But the frustrations went both ways, with Guy annoyed when his parents, Bryan and Jo, gave Macdonald and his wife Anna a loan to help them move into the family homestead.
Bryan and Jo also helped their son and Kylee move into their own home, on the McKinnon block that they had leased for years and eventually purchased.
The wider family was surprised when Scott Guy told a family meeting he wanted to inherit. His father told him he'd had had to buy it off his father, and Scott would too.
In May 2008, Scott and Kylee, and Macdonald and Anna, acquired 10 per cent stakes in the farm. Two years later Guy was found shot dead in his driveway.
Bryan Guy has since bought out Kylee, while Anna Macdonald no longer has shares either.
Placing assets in a trust or a company is a way of resolving issues on farm succession, Wills says.
His own farm, north of Napier, which his father bought in 1956, is in a trust.
He and his brother lease land and he says the property is only big enough for two, so it was a good thing his other three brothers weren't interested in staying on the land, although they still benefit by being beneficiaries of the trust.
But when a farm was too small for all the children to work on, inherit or buy into, it could be a problem. "Generally the farm is only big enough for one, and there is not enough cash generated to spread out the inheritance," Wills says.
"Certainly in my banking days there were numerous situations with a lot of tensions that eventually led to family breakdowns."
Agriculture consultant Trudy Laan says it is common in dairying for managers to become sharemilkers, which helped them build up assets to get into a position to buy the farm or another property.
Because of the connection to the land, parents often felt they needed to pass the business on, but they were not obliged to, and should take care of themselves first.
"We see it quite often where the parents end up having to sell because they've stretched themselves too far to set up their children, so everybody loses. You often see them in a bad situation in their retirement because they haven't sold and set themselves up well."
The key to planning a successful farm succession is getting professional advice early, rural law and farm succession lawyer Ian Blackman says.
The Rotorua lawyer is speaking at a Farm Succession Summit in Palmerston North this week. His book Keeping Farming in the Family, details what a successful plan entails. About 90 per cent of farmers consider the farm a family business and 70 per cent want to sell to their children, but only 10 per cent have a plan, a recent ANZ survey of 750 farmers found.
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