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Succession planning and wills: What British farming families need to know
Farmers need to have frank discussions with their family, listen to their views and expectations, and include them in the decision making process.
Alistair Spencer, the solicitor for Adam Scott and an associate of Lime Solicitors/ Shakespeare Martineau, tells us more.
Richard Scott, a farmer, died in 2018, leaving an estate worth approximately £5 million.
His son Adam farmed with him for many years and had tenancies over parts of the farm. Adam worked on the farm because of representations his father made that he would take over the farm and the farming business.
Richard suffered from multiple illnesses during his last few years and lost the ability to speak. During this period his partner married him, despite concerns regarding his capacity.
Ultimately Richard failed to make provision for Adam within his last will.
In late 2018, Adam brought a claim against his father’s estate on the basis of proprietary estoppel. He also challenged the validity of his father’s last two wills.
Proprietary estoppel allows someone to bring a claim when they have been promised they will receive assets they rely on that promise to their detriment, but where ultimately those promises are not kept.
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To continue farming the farm pending the determination of his claim, Adam brought injunctive proceedings.
At a recent hearing, the High Court granted Adam an interim injunction preventing his stepmother and her children from trespassing on his land and disposing of farm machinery.
The case is ongoing.
Over recent years, numerous proprietary estoppel and will disputes have gone to trial. Nearly all the reported cases involve farming families where promises have been made.
There are many reasons for this, including:
- increasing agricultural land values, which leaves more for families to fight over;
- a reluctance to consider succession planning;
- the multi-generational nature of many family farms;
- increasing numbers of farming families where the next generation are moving away from agriculture;
- many family farming estates have significant assets but little cash that could be used to settle disputes, often making settlement difficult.
What should I do?
Farmers need to consider succession planning early and involve their family. Often succession planning is either not considered at all or left too late.
The farmer needs to have frank discussions with his family, listen to their views and expectations and include them in the decision making process, particularly when family members have worked on the farm.
The farmer should make a professionally prepared will, taking account of his discussions with his family. It is sensible to ensure that the family are made aware of the provision made for them within the Will to minimise future disagreements.
This process should not be left to the end of an individual’s life and should occur before concerns arise regarding an individual’s capacity. If there are concerns about whether or not someone can make a valid will, a report should be obtained first from a qualified doctor.
Giving assurances to family members will lead to expectations and potential claims if those assurances are not fulfilled by the terms of the will. Those claims can be extremely costly both in financial and emotional terms.
Proper succession planning can minimise both the risk of a family fall out and any claims being brought against the estate.
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