The family farm – making sure you keep your wealth where you want it
Succession planning for farming families is often complicated but it's crucial when it comes to peace of mind and avoiding conflict among your loved ones later.
Often most pressing is answering the question: How do I make sure that not only are my wishes carried out but that all my children, those involved in the business and those not, are treated fairly?
With numerous issues to consider and address, Wards Solicitors' award-winning Wills, Probate and Mental Capacity Team has experience of farming estates and can help you get it right for everyone.
In this way, you can minimise the risk of a family fallout and any claims being brought against the estate whilst preserving the farm for the next generation and ensuring its ability to continue trading in the most profitable way possible.
Why are farming estates so complex?
Farmers tend to have substantial assets which have often been passed down from generation to generation. Enabling this 'handing down' tradition to continue remains important to many.
In addition, many farmers are asset rich and cash poor. Often, they have several children, some involved in the day to day running of the farm and others who have moved away with nothing at all to do with the business.
This can make it difficult to treat children fairly when a farmer wants to pass down the farm intact so their successor can continue to run a successful business.
Why are more farming families ending up in an inheritance dispute?
Sadly, the number of farming families falling out over who gets what is on the rise - often because, despite the presence of a Will, a child believes they were not left the share of the farm they had been promised.
Known as 'proprietary estoppel' cases, they often turn into hard-fought battles which in some cases have ended up with the family farm having to be sold to meet the financial needs of those involved.
The execution of a well-drafted Will can ensure this type of distressing dispute is avoided.
Can I reduce or eliminate Inheritance Tax?
If Inheritance Tax becomes payable on death, it may mean selling some of your farming assets to raise cash thereby reducing the profitability of the farm and available assets. This is obviously not what you want.
Agricultural Property Relief and Business Property Relief is often available to set against farming and business assets. This will often vastly reduce, if not eliminate, any Inheritance Tax payable.
Will farm diversification affect Agricultural Property and Business Property Relief?
Care must be taken how diversification projects are managed within the farming business to minimise the impact on Agricultural Property Relief and more particularly, Business Property Relief.
This might include looking at projects to boost the less profitable side of traditional farming including caravan and camping parks, business lets of barns for office space or residential accommodation, solar farms, wind farms and sporting activities.
It's also worth remembering that farmland near towns or villages or around future infrastructure projects, may be more valuable because of its development potential than basic agricultural land.
Specialist help and advice
An in-depth discussion with Wards Solicitors' specialist Wills and Probate lawyers, followed by the execution of a professionally-drafted Will, can ensure your wishes are followed with all reliefs maximised to ensure assets are preserved and passed down to the next generation.
Lasting Powers of Attorney for both property and financial affairs as well as for health and welfare should also be put in place so your farming business can keep running should you be unable to do this yourself.
Get in touch
Sarah Woodward specialises in Wills & Probate, in particular working with individuals and families in the agriculture sector, involving farms and estates entitled to agricultural property relief and business property relief. Contact Sarah on 01275 850470 or email email@example.com.
Click here for further details on Wards Solicitors' specialist Probate Disputes Team.