We cannot stress enough just how important it is for farmers – or indeed any family business owner – to think about wills and succession planning. Leaving things to chance can cost your estate, create practical difficulties and at worse can result in family disputes.
Not having a will means that the Intestacy Rules will determine who inherits your estate and who will be in charge, and this may not be what you had thought would happen. Even if you have a will, if it is out of date it can also cause problems, particularly if there have been changes in the family dynamic since the will was made. It is not unusual for there to have been a falling out between family members and if you are thinking of disinheriting someone who might otherwise expect to benefit from your will, we can advise you how to take preventative steps to ward off a challenge or proprietary estoppel claim (which are becoming increasingly common in farming scenarios).
It is also important to consider the inheritance tax (IHT) implications of your plans as there are several exemptions and reliefs that can be used to reduce the IHT burden. These include the Residence Nil Rate Band, Business Property Relief and Agricultural Property Relief. And what will happen if you become incapacitated? Lasting Powers of Attorney can help others to continue running the farm.
Having acted for many generations of farming families we understand the complexities of succession planning in this particular area and you will be in safe hands. For more information see our Wills & Inheritance pages, or you can request a free Farming Review.
“One day son all this will be yours”. It might sound like a bit of a cliché but promises such as these might have been made. However when dad has passed away the son (or daughter!) expecting to inherit the farm is disappointed to find out that these promises were not kept. Claims based on proprietary estoppel seek to redress this where the claimant can show:
Such claims appear to be becoming more frequent, and there have been a number of recently reported cases involving farming families or family businesses. Typically, the child has worked long hours for little pay with the expectation that the family farm will come their way. On occasion claims have even been brought before the parent involved has died if their child has concerns about the future plans of their parent.
The Court has a number of different options open to it when deciding such cases in favour of the claimant including enforcing the promise and meeting the claimant’s expectations, or compensating the claimant for the detriment they have suffered.
Avoiding possible claims is something to consider when planning for your future.
If you do not plan for the future of your farm, you could leave your family with larger than necessary Inheritance Tax bills, sibling disputes over ownership of the farm or problems with landlords – to name but a few. Planning ahead should give you the peace of mind that all your hard work has not been in vain.
