23 March 2023

Prevention is better than the cure: preparing the future of the family farm

‘The sad tale of a farming family’. That was the Court of Appeal’s verdict upon concluding a drawn-out court battle that saw daughter and mother fight for a share of the family’s £2.5-million agricultural estate.

Making a claim for proprietary estoppel

Dad’s death had seen the estate left to his widow. However, the daughter claimed she was entitled to a slice of the estate due to her past commitment to the farm. She also said verbal promises had been made to her, which led to the start of legal action known as ‘proprietary estoppel’.

Proprietary estoppel occurs when someone is given a clear assurance that they will acquire a right over property. The person then reasonably relies on that assurance, and acts to their detriment. There would be an estoppel claim if it would be considered unjust or inequitable  allow the other person to go back on the assurance they made.

The eventual Court of Appeal decision forced the farm’s sale, with the widow having to raise enough money to pay the daughter.

The rise of contested Wills

Whilst this high-profile court battle reached its conclusion a couple of years ago, its details are pertinent today with lawyers witnessing an increase in contentious probate cases or, simply put, ‘contested Wills’. For farming families, these cases can have devastating consequences and, at their worst, see estates lost to families that have owned and managed them for generations.

There are certainly various factors within agriculture that can see such problems arise. In highlighting them, it must be hoped that those within the sector take note and, more importantly, act.

Family partnerships very often evolve on a farm over the course of many years. The head of the family may willingly accept a son, daughter, nephew, or niece into the business and in conversation may say words to the effect of ‘one day all of this will be yours’. From a legal perspective, however, the crucial question is have formal structures been put into place for a time when that may become a reality? There may be a tendency to push such tasks to one side.  Whilst understandable with extremely busy farms to manage,  it is certainly not the right thing to do as it is likely the issue will simply grow into a bigger problem further down the line.

Prevention is better than the cure

“None of us know what tomorrow will bring – a fact that perhaps resonates now more than ever before,“ says Katherine Marshall. ”As uncomfortable as it may be, the head of a family farm must consider a time without them. That could be their passing, or their incapacitation. Either way, the lack of adequate planning and transparency may well cause massive complication, family friction, and ultimately the sale of the farm and the loss of livelihoods for those left.”

“This is to say nothing of the expense (in money, time, and mental stress) of such contentious probate cases. Of course, we would always look at attempting to resolve cases without the need for formal court proceedings in the first instance, but many cases inevitably lead to court as the only way in which the remaining family members can reach a resolution.”

Prevention is always better than cure, and such potentially painful situations most certainly can be prevented. If you are facing a similar issue, contact Katherine Marshall. An agriculture specialist in the dispute resolution team, she can discuss your matter further.

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