By Andrew Clements, Director at Grayson Clements
New Zealand is on the cusp of one of the largest intergenerational transfers of wealth in our history. By 2040, more than $1 trillion in assets will move between generations across the country.
For farming families, this raises both challenges and opportunities. How succession is handled will shape not only the future of individual farms, but also the strength of family relationships and the wider rural economy.
Yet too often, succession planning is approached with the strategy of a “pin the tail on the donkey” game – late, rushed, and mismatched to the family’s needs.
At Grayson Clements, we’ve seen first-hand how succession can either set families up for success or fracture relationships for good. The difference often comes down to three things: start early, treat succession as a process, and begin with values.
Start early to avoid conflict
Around 70% of family disputes around succession arise because the process started too late. By delaying, families allow mismatched expectations to form, agendas to clash, and resentment to grow.
The earlier families begin succession conversations, the easier it is to create safe, constructive discussions, and the less costly the process becomes in the long run.
Succession is a process, not an event
Succession doesn’t happen in a single meeting or with a single document. It’s a journey that unfolds over time. Structures like trusts, companies, and equity partnerships are all useful tools but they should serve the family’s goals, not dictate them.
The real starting point is understanding the people: their values, aspirations, and vision for the future. Structures should be designed around that foundation.
The power of family banking
One innovative approach we’ve helped families adopt is the concept of family banking. Instead of forcing the next generation into debt-heavy traditional models, the family leverages its central asset – often the farm – to provide opportunities for all children.
For example, we worked with a farming family whose son wanted to invest in an engineering business rather than take over the farm. The family trust borrowed funds at 5% interest and loaned them to him interest-free, in exchange for a small equity stake. Within three years, the business had doubled in value, the loan was repaid, and the trust retained a valuable shareholding.
Family banking can help ensure every child has opportunities to grow, while keeping the family united and the farm secure.
Governance: Keeping the conversation alive
Market conditions, family circumstances, and opportunities change over time. Good governance helps families adjust without panic or conflict.
For some families, this means setting up a family advisory board. These boards create a safe space to meet regularly with advisors (accountants, lawyers, financial specialists) and to review the strategy together. We’ve seen families grow their net worth from $6 million to $18 million in under 10 years by consistently applying strong governance processes.
Begin with values
Succession planning isn’t just about financial capital. Families also hold social, intellectual, human, and spiritual capital – the things that define who they are and what they value. By starting with these, families design strategies that align with their identity and aspirations.
The result? Plans that don’t just preserve wealth but also strengthen relationships and empower the next generation.
Want to learn more?
Succession is one of the most important journeys a farming family can embark on. When approached early, as a process, and with values at the centre, it can transform families both financially and relationally.
At Grayson Clements, it’s our privilege to help families design pathways that work with who they are, not against it. If you’d like to start the conversation about your own succession journey, we’re here to help.
You can also hear more of my thoughts and real-life examples in my interview on the Farmers Weekly podcast: www.farmersweekly.co.nz/news/farmers-weekly-podcast-full-show-22-august/
