Succession planning is an essential part of running a family farm business and when it is done properly it can reduce the risk of family disputes. It puts you in control of what happens to your interest and assets either during your lifetime or upon your death. It is important as it can avoid leaving behind issues for your family or the potential for large tax bills which could cause cash flow difficulties, this is especially crucial if your intention is that the farm business is to continue.
As many farms are often run by families and can provide both a family home and an income, they can be particularly susceptible to disputes, particularly where family members have different visions for the future of the farm after the older generation have passed away.
What happens if you die without a Will?
If you die without making a valid will, then your estate will be subject to the ‘intestacy rules’. For many people these rules do not distribute their assets how they would have chosen. Under these rules, only married or civil partners and some other close relatives can inherit. If you have separated but not divorced from a former partner, then they will still inherit your estate regardless as to whether you are co-habiting with a new partner or not. Co-habiting partners cannot inherit under the rules of intestacy.
The intestacy rules can also have high capital gains tax consequences, these can be easily avoided by having a carefully prepared Will.
What are the benefits of having a Will?
Having a Will in place allows you to decide what happens to your estate and who benefits from your property, interests and belongings on your death. This also includes what happens to the farming partnership, company, or any tenancies.
How can Denney King help you?
Costly mistakes are often made when distinguishing, within a Will, farming business assets and the farm itself. We can help examine your personal and business assets and identify any areas of potential confusion at an early stage to help minimise any future family arguments.
We encourage an open dialogue with your accountant to ensure that there is joined up thinking amongst your advisors, with the aim of providing a clear picture to the Revenue following your death, particularly if reliefs such as Agricultural Property Relief and Business Property Relief are to be claimed. Our expertise in succession and inheritance planning will help achieve the best overall outcome for you and those you care about.
The most effective way to make sure your wishes are carried out is to take specialist legal advice. Our Agricultural and Private Client specialists work closely to provide you with the expertise you need.
Contact our Evesham or Leominster offices for more information
Director of Farming & Estates
Senior Associate Solicitor – Denney King
Call: 01386 764728