When the head of a farming household dies without a valid will, the consequences extend well beyond personal grief. The viability of the entire operation, and the livelihoods of those who depend on it, can be placed at risk overnight. IFSA Asset Managers highlights the critical importance of holistic financial planning for South Africa’s agricultural sector, where the implications of dying without a valid will can be complicated and consequential.
The agricultural sector presents estate planning challenges that demand specialist attention. Farming operations are capital-intensive businesses where land, equipment, water rights, and production contracts are all deeply intertwined. Given that a single commercial farming operation can represent decades of accumulated capital, often spanning multiple generations, the absence of clear succession planning creates outsized, and unnecessary, risk.
Frikkie van Loggerenberg, CEO of IFSA Asset Managers, says “Estimates suggest that fewer than 15% of South Africans have a valid will at the time of death, and there is little evidence to suggest that the figure is materially better among farming communities and specific farmers. When there is no valid will, the Intestate Succession Act dictates how assets are divided, and it makes no allowance for whether a farm can survive that division. We have seen families forced to sell productive land at below-market prices simply to settle an estate or pay out heirs who have no interest in farming.”
Agricultural estates differ from conventional estates in several important respects. Farming assets are typically illiquid: land cannot be easily divided without undermining the economic unit, and specialised equipment often has limited resale value outside a working operation. Many farming businesses also involve informal arrangements – verbal agreements with neighbouring farmers, shared infrastructure, or family members who contribute labour without formal employment contracts – any of which might become contested in the absence of clear documentation.
Water rights and production quotas present additional layers of complexity. If an estate is poorly planned, these rights can be lost, downgraded, or tied up in legal proceedings for years. The same applies to export quotas, supplier contracts, and compliance obligations that are integral to the business.
Succession is a further complication. Family farming operations must address questions that most households can set aside: who will run the farm? How will non-farming heirs be compensated fairly without forcing a sale? What happens to employees and their families who live on the property? These questions require careful, deliberate planning; and a valid, regularly updated will is the foundation on which that planning rests.
IFSA Asset Managers advocates for estate planning to be embedded within a comprehensive financial strategy rather than treated as a standalone legal exercise. For farming families, this means coordinating estate planning with investment strategy, insurance coverage, tax planning, and retirement provision so that each element reinforces the others.
“We take what we call a 360-degree view of each client’s financial world,” says van Loggerenberg. “For our agricultural clients, that means understanding the farming operation as both a business and a family asset. It means ensuring there is adequate life and disability cover so that the farm can continue operating if a key person is lost. It means structuring ownership, whether through trusts, companies, or other vehicles, in a way that facilitates orderly succession. And it means stress-testing the plan against realistic scenarios, including what happens if commodity prices fall or if the next generation chooses a different path.”
Tax planning is equally critical. Estate duty, capital gains tax on deemed disposals, and the potential for double taxation on assets held in trusts all require proactive management. Agricultural assets often attract significant tax liabilities on death, and without a clear plan to fund these obligations, the estate itself may need to be diminished to meet them.
Van Loggerenberg urges farming families to make estate planning a standing item in their annual financial reviews. “The complexity many people associate with will drafting is largely misplaced. Modern estate planning can be straightforward and cost-effective, yet the psychological barriers remain formidable. Among farming families, there is often an added reluctance to discuss what happens to the farm after the current generation, because the farm is so closely tied to identity and legacy. That reluctance is understandable, but it is precisely why the conversation matters so much.”
IFSA recommends that farming families, at a minimum, ensure they have a valid and current will that addresses the specific structure of their agricultural assets; review their estate plan whenever there is a material change in the operation, family structure, or legislation; coordinate their will with appropriate insurance, investment, and tax strategies; and seek professional guidance that understands the particular demands of agricultural wealth.
