Latimer Hinks Solicitors, one of the North East’s leading law firms, has issued a warning to farming families to avoid costly inheritance battles by making a will.
It follows a recent High Court case in which a son brought a proprietary estoppel action against his father and brother,claiming he was repeatedly assured he would eventually inherit the £8m family farm he had worked on since the 1970s.
Instead, his father changed his mind and transferred it to his other son, a property developer.
The doctrine of proprietary estoppel has a wide ambit. At its most basic, it can be invoked where, for example, someone has received an assurance of an inheritance and they have acted upon that assurance to their detriment, only to find that the person who made the assurance later reneges on it. If it is invoked successfully, the court has a range of remedies, including a discretion to make good the original assurance.
Elizabeth Armstrong, who is a Director and Head of the Trust Department and a member of Latimer Hinks’ Farms and Estates team, said: “This is an example of how the question of property inheritance can tear farming families apart.
“If you are going to make any promises over inheritance, take legal advice and ensure you make a will which accurately reflects your wishes. If you do change your mind, it is crucial to ensure that your will is updated.
“It’s also a good idea, if you can, to discuss your intentions with anyone who may expect to inherit. Succession planning is key which involves wills and partnership agreements being put in place and regularly reviewed/revisited particularly if and as circumstances change.”
In the latest dispute, the Oxfordshire farmer, who was supported by his mother, won the case against his father and brother.
Rosanne Tweddle, property solicitor in the Farms and Estates team, added: “It’s possible that discussing your wishes could instigate a proprietary estoppel claim but it is more likely to avoid unnecessary anguish and expensive and divisive legal action.”
“Making lifetime promises or assurances to family members and beneficiaries can be very risky indeed, particularly if your Will doesn’t follow through on what you might have said. If you have made any assurances during your lifetime but have later changed your mind, it’s a good idea to discuss the reasons for that with the person concerned, so that any risk of a proprietary estoppel claim after your death can be minimised.”
“It is important to be clear and set out the terms upon which your children work with or for you, via a contract of employment or partnership deed.
“As land values increase, more proprietary estoppel cases, typically involving farms, are coming before the courts. It is important that farming clients draw up a clear plan of what they intend to achieve, and the reasons behind it.”