An investigation of estate planning among farming businesses in the Western Cape Province, South Africa

Abstract

Estate planning is one of the important processes in managing a business, and farm owners often avoid it since it deals with emotional and difficult issues. Additionally, studies have highlighted that decision-making on future ownership of many businesses is still poorly understood. This study investigated the extent of the availability of estate plans amongst farmers in the Western Cape Province of South Africa. Interviews were conducted, and data was collected from 42 farmers using structured questionnaires following a mixed-method research design. Descriptive statistics such as mean, frequencies and percentages were employed. The study revealed that the majority (66,67%) of the farmers do not have any estate plan available. In comparison, 47,62% of the farmers were unfamiliar with the estate planning process. In addition, the study also revealed that the businesses own assets with a minimum value of R500 000 to a maximum value of over R2,5 million, showing differences in the commodities across the Western Cape Province. It is recommended that farmers be aware of their responsibilities regarding estate planning, and the Western Cape Department of Agriculture should conduct workshops around the legal side of the business. For funding purposes, the Western Cape Department of Agriculture needs to include conditions related to estate plans in the application forms to prevent the closure of businesses after the recipient's death.