In this article solicitor Emma Walker reviews a case of an inheritance dispute involving a farming family.
Ownership of farmland has been the source of many inheritance disputes and because farming businesses are often family concerns, these can have an impact far beyond the pure economic consequences, as a recent case involving a farming family in Somerset shows.
The family farm consisted of farm buildings and land of about 200 acres, worth in the region of £2.5 million. It was owned by a couple who had four children.
One of the couple’s daughters had left school and worked on the farm for more than 30 years. She claimed that she did so on the understanding that she would inherit the farm when her father died. After his death in 2014, she claimed that she was entitled to the whole of the farm.
Her mother denied that her late husband had made any such promise to their daughter and contended that, even if he did, she, the co-owner of the farm, had no knowledge of it. When her husband died, his will left his entire estate to her.
As is usual, a number of witnesses appeared for each of the parties to the dispute. One of the witnesses was an accountant who had been consulted by the couple as regards succession planning for the farm. The proposal discussed was that the daughter should inherit the farming business after both of her parents had died and the other children should also receive bequests. Although this did not lead to any action being taken, it was considered significant by the court.
The issues were complex and the court hearing lasted five days.
On the weight of the evidence, the judge concluded that the daughter was not being told that she only had to work on the dairy farm for a year or two and then she would inherit it. She was being asked to work on the farm until her father was no longer capable of running it, which was a very substantial commitment. When the representations were first made, that event was expected to be many years in the future. Indeed, as it turned out, it was about 30 years away. She therefore deserved to be compensated for keeping her part of the bargain.
In a long and carefully considered judgment, the court ruled that the daughter should receive a cash settlement of nearly £1.2 million.
Emma Walker, a solicitor in our wills and probate team at Watson Ramsbottom commented “The main problem was that there was little documentary evidence and much of the evidence related to meetings and events that had taken place many years earlier. If you are in a similar position and want to avoid expensive and acrimonious litigation down the line, it is important to make business succession plans that are properly documented. Contact us for advice.”