As the new year begins, it’s the ideal time to “take stock” and put proactive measures in place to protect your farm or agricultural business. Legal disputes can be costly, stressful and damaging to relationships. By planning ahead, you can reduce the risks of conflict and ensure the future security of your farming legacy.
1. I will ensure my Will and estate planning are up to date
Whether it be a marriage, divorce, or new business ventures, circumstances change, and this can make old plans obsolete. You should make sure your Will and estate planning reflect your current situation and include clear provisions for your agricultural assets.
2. I will stay up to date with tax changes
Major reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) are on the horizon. An outdated plan could lead to unnecessary tax liabilities or disputes. Regular reviews ensure tax efficiency and compliance with evolving legislation.
3. I will start succession conversations early
Succession planning often gets delayed, and we understand – it’s often an uncomfortable topic to discuss. Having early and open conversations with those affected (or not affected) can, however, help to manage expectations of everyone involved, and prevent surprises that can lead to conflict after you’re gone or no longer in charge.
4. I will aim to provide fairness and consider provision for non-farming heirs
Farming heirs typically inherit land and business assets, which can leave those who are not involved in farming feeling excluded. Giving proper consideration to financial compensation or alternative provisions to maintain family harmony can help to avoid resentment or litigation down the line.
5. I will obtain accurate valuations of land and assets
Land, machinery and other assets can fluctuate significantly in value. Accurate and up to date valuations are essential for tax planning, fair distribution, and informed business decisions.
6. I will formalise business relationships
Informal arrangements (such as shareholder and partnership agreements) can lead to disputes or legal complications. In the absence of formal documentation, business partners can face costly legal challenges which can introduce significant delays to a farm’s operation. By simply obtaining advice and ensuring the relevant legal documents are in place from the start, you minimise the risk of you (or your heirs) having to put things right at a later date.
7. I will put Lasting Powers of Attorney (LPA) in place
Unexpected illness or incapacity can be highly disruptive to operations and business continuity. LPAs ensure trusted individuals can make financial and/or health decisions when you cannot, avoiding delays in accessing funds for essential farm expenses or in making important business decisions.
8. I will document promises and asset transfers
Verbal assurances can sometimes be unexpectedly binding where they are relied upon to someone’s detriment. Keeping written records of any promises or asset transfers will prevent misunderstandings and help to avoid future claims being made.
9. I will review and update Land Registry records
Outdated records or registrations can delay sales, succession, and refinancing. Regularly review and update records to keep everything accurate and compliant.
10. I will seek professional advice
Estate planning for agricultural businesses is complex. Professional advisers can identify tax-saving opportunities, draft robust agreements, and help you navigate any possible contentious probate risks.
Next steps
Ultimately, your farm is more than a business – it’s a legacy built on years of hard work. These resolutions are essential steps to safeguard your assets, minimise your tax exposure and prevent disputes. By taking control now, you ensure that your wishes are respected, your farm remains profitable, and your loved ones are spared unnecessary stress. Make this year the one where you take control and secure peace of mind for the future.
If you would like tailored advice regarding the above, please don’t hesitate to contact Mills & Reeve. Our firm’s specialists have extensive experience in agricultural estates and can help you navigate complex succession planning and contentious probate risks with confidence.
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Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.