Ontario accounts for nearly 25% of Canada’s farms with nearly 71,000 farmer’s at the helm, most of whom are over the age of 55. Considering that the value of farm property in Canada is nearly half a trillion dollars, we are on the cusp of a huge surge in the amount of wealth which is about to be transferred from one farming generation to another. For a farm property that is considered a qualified farm property, per Canada Revenue, there is a tax-free roll over available to the next generation, much like RRSPs are eligible for a tax-free roll over to a spouse. This roll-over can also apply to shares in a family farm corporation or family farm partnership.
However, like the rest of us, not every farmer will be in a situation to simply pass on their life’s work to the next generation. Perhaps the farmer is in a second marriage and wants to ensure that their farm is able to provide for their spouse before the children have complete control, or perhaps the children want nothing to do with the farm. More complicated still, what happens if only one child wants to take over the farm, but their siblings don’t and the farmer wants to ensure their children are treated equally but the vast majority of the farmer’s estate is wrapped up in the farm property. Proper estate planning measures are available and should be discussed in detail with an estate planning professional to ensure that your farm and your family dynamic doesn’t turn to fertilizer to help legal litigation fees grow.