THE WORLD has changed hugely in recent generations, no more so for those of us in rural areas. In particular, each generation’s ability to travel further and more affordably than their parents has made the world a much smaller, much more accessible place for the young today. The rise of connectivity – questionable rural broadband speeds aside – has only furthered this trend.

As a result, friends and families are spread farther and wider than ever before, and, where previous generations would have seen children following in their parents’ footsteps, this is no longer necessarily the automatic choice. Our ability to peek into different worlds via social media, combined with the fact that we can now feasibly reach those worlds, has meant that this natural course follows less regularly than it once did. Combined with the rise of urbanisation, it becomes easy to see why we have started to see some children leave farming communities and not necessarily return.

An unintended consequence of this trend is that the question of succession planning has become more complicated than ever before. With life expectancy continually on the rise, many farmers are working later into life and, as a consequence, children who may have moved away with an intention to return are now not necessarily doing so because by the point that their parents come to retire, they themselves are likely to be settled and have careers and families of their own to consider.

At this juncture, families find themselves with difficult decisions to make, not least how to fairly split their assets should their offspring be divided over the future direction of the farm. Many options exist, but none would suit all of the parties.

One child may wish to continue to work the land but not be in a position to buy out his or her siblings, and a partnership would always be unlikely to attract the interest of those children who had long moved away.

Splitting the farm, as is more traditional on the continent, would leave a highly uneconomical holding to manage. Selling the farm would suit most parties but leave the incoming farmer high and dry, and could end a long family association with the holding. The flip side to this final coin would be to pass the farm to one child, though like any inheritance scenario, this can cause a major rift in the fabric of the family.

There’s an emerging solution to this problem, however: life assurance, or whole-life plans. These policies pay out a pre-determined sum, for example based upon the value of the farm, upon the death of the holder. This can smooth out succession planning for the farm, as well as the transfer of wealth, in a fair way, allowing a holding to be passed to one beneficiary and a cash sum to balance this to his or her siblings.

Like insurance, life assurance will pay out a pre-defined amount, but the major difference from insurance is that it is guaranteed to pay out the amount outlined in the policy in the event of the holder’s death – and this money can be given to the children who do not inherit the farm.

A life assurance policy will not be for everyone, but it can be a balancing act – policyholders need to consider carefully how much they can afford to pay in and what represents a good investment. In some cases, they may invest more than it pays out. The value of the farm will change over time too – the holder may want to consider index-linking the policy so that the pay-out is a fair reflection of the farm’s value.

Whole life plans are certainly becoming more popular as more people come up against the complications of passing on their estate. By taking one out, they can be assured that all of their children will be looked after.