Wills and farm partnership agreements – can you afford not to have them?
21 September 2018
The recent case of Wild v Wild & Others once again highlights the need for farming families to accurately record their succession wishes and the ownership of farm assets in professionally drafted wills and farm partnership agreements. Relying on a family 'understanding' as to how assets are to pass between the generations, opens the door to complex inter-family disputes and the potentially crippling costs of litigation.
Wild v Wild & Others involved two brothers in a dispute over ownership on the dissolution of a dairy farm partnership in Derbyshire. The decision confirmed that farming families should not make the assumption that just because farm is used by a farming partnership, the farm land has become a partnership asset. A farm partnership can operate entirely effectively on the basis that a family member retains personal ownership of that land, and so the courts will not imply a term that the farm land was a partnership asset on the basis of business efficacy alone. Nor will the inclusion of farm land in the partnership accounts determine that the land has become the partnership property, particularly where those accounts were drawn up without discussion or the agreement of the other partners.
For advice about putting in place a farm partnership agreement to record the ownership of the farm land and its capital appreciation, and how that can help with your succession planning, please contact Jonathan Stephens, Torsten White or Belinda Watson.