Somewhere in the Waikato tonight, a couple in their mid-60s will sit at the kitchen table after milking and not talk about the farm. They know they should. They have known for years. But it is a hard conversation to start, and there is always another season to get through first.

They are far from alone. Rabobank's 2025 report, Changing of the Guard, found that around 17,320 New Zealand farm and orchard owners, more than half of the national total, will reach 65 within the next 10 years. The farming assets that will change hands over that decade are conservatively valued at $150 billion. It is the largest intergenerational transfer of wealth this country's agricultural sector has ever faced.

And most families are not ready for it. Only one in three farmers has a formal succession plan. Another 17% have talked it through but put nothing in writing. Half have not discussed succession with anyone at all.

Why it keeps getting put off

It is rarely about money. In our experience the real blockers are human ones.

Parents worry about causing a rift between their children. Many have farmed the same land for 40 years and don’t know who they are if they are not running it. A lot of couples have never worked out where they will live or what they will live on once they step back. And everyone assumes there will be time to sort it out later.

The trouble is that later has a habit of arriving all at once. A health scare, a death, a marriage ending, or a successor who finally runs out of patience. When that happens, decisions that could have been made calmly over a few years get made in a hurry, often by people who are grieving or angry, and sometimes by a court.

Every farmer Rabobank interviewed for its report said the same thing: they wished they had started earlier. Delay doesn’t just add stress, it closes off options.

The fork in the road

Every farming family reaches the same fork, and which way you go decides almost everything that follows.

Path one: someone in the family wants the farm. The job is to get it to them without breaking the business or the family. That means a structure that lets the successor build up ownership over time, a way of treating the other children fairly, and a retirement for the parents that doesn’t depend on the farm staying exactly as it is.

Path two: nobody does. Rabobank found that 39% of farmers have no child seriously interested in taking over. For those families, succession is a sale, and the work is front-loaded. Most of the value is created, or lost, in what gets sorted before the property is listed.

And there is a third position, which is more common than either. A lot of families are not on a path at all, because nobody has actually asked the question. Parents assume a child wants the farm, or assume they do not. Children assume their parents have a plan. Until someone asks directly, nothing else can be designed.

If you are not sure which of these describes your family, our succession path checker takes about three minutes and will tell you which path you are on and what to deal with first.

What a family handover actually involves

When there is a successor, the legal work usually covers four areas.

Getting the successor in. Very few successors can buy the farm outright. Most build up ownership in stages through a sharemilking agreement, an equity partnership, a lease with a right to buy, or a gradual transfer of shares in the farming company or interests in a trust. The right mix depends on the farm, the debt, the bank, and how much the parents need to take out.

Treating everyone else fairly. This is where most succession plans stall. Leaving the farm to one child and smaller amounts to the others feels unfair to the ones who left. Splitting it equally can make the farm unworkable. Fair is not always equal, and there are practical ways to balance it, but they need to be designed and explained while the parents are alive. We have written more about this in ‘Fair isn't always equal’.

Looking after the parents. Where Mum and Dad will live and what they will live on are often the questions that hold everything else up. A life interest in the homestead, a documented right to occupy, or a move to town, combined with an income stream from the farm, all need to be settled before the structure is built around them. See ‘Where will Mum and Dad live, and what will they live on?’

Protecting the successor. A child who has worked the farm for fifteen years on the strength of a promise is in a vulnerable position if that promise is not written down. So is the farm if the successor's own relationship ends without a contracting-out agreement in place. We cover this from the successor's side in ‘You've worked the farm for 15 years. What have you actually got?’

What a sale actually involves

When there is no successor, the farm is usually the parents' retirement fund, and the goal is to get the best possible price with the fewest surprises.

The work that matters most happens 12 months or more before listing. Is it better to sell the land, or the company that owns it? How will the Fonterra shares be dealt with? What is the GST position? Are the effluent, water and discharge consents current and transferable? Could an overseas buyer be in the mix, and what would that require? Each of these is far cheaper to resolve now than in the middle of a negotiation, and buyers are looking harder at compliance than they used to. Our post ‘Selling the family farm: what to sort before you list goes through each one.’

Check the structure you already have

Many farms in the Waikato are owned through a family trust set up decades ago. The Trusts Act 2019, which came fully into force in January 2021, changed what trustees have to do, including a presumption that beneficiaries must be told they are beneficiaries and given basic information about the trust. Older farm trusts with wide classes of beneficiaries can carry obligations the family never expected.

If your trust deed has not been reviewed since 2021, it is worth doing before any succession plan is built on top of it. The same goes for wills, enduring powers of attorney, and any partnership or company agreements.

Where to start

You do not need a finished plan to begin. You need a first step, and for most families it is one of these:

•           Ask the question. If you do not know for certain whether any of your children want the farm, find out. Directly, and without assumptions.

•           Work out your number. What do you actually need to live on each year once you step back? Get the figure on paper before anything is structured around it.

•           Decide where you will live. It sounds simple. It holds up more succession plans than tax does.

•           Get the paperwork in one place. Trust deed, wills, company documents, consents, Fonterra share details, bank facilities. Knowing what you have is the starting point for everything.

•           Talk to a lawyer before the family meeting. Most families find it easier to know what is actually possible before raising it with everyone else. It means the conversation is about real options rather than fears.

The conversation is the hard part

The legal structures for farm succession are well understood. Sharemilking agreements, equity partnerships, trusts, life interests and contracting-out agreements are all tools we use every week. What is genuinely difficult is starting the conversation, and making sure everyone who needs to be part of it is.

OCLaw works with farming families across the Waikato, Hauraki, Bay of Plenty and Coromandel from our offices in Hamilton and Waihi. If succession is a conversation your family keeps putting off, come and talk to us first. Then have the family conversation, knowing what your options are.

Find out which succession path you are on. Try our three-minute succession path checker https://oclaw.co.nz/farm-succession-planning Then get in touch at oclaw.co.nz/contact.

This article is general information only and is not legal advice. Every family's situation is different.