Making time for tomorrow

With the shortage of rain this Spring and significant attempts to salvage crops, making a Will is probably the last thing on many farmers’ minds. But if a farmer dies without a Will the law dictates who receives their assets and it may not be the people they expected!

The lesson is that whilst thinking about the present is vital, the future needs thought too, as the following example illustrates.

John’s primary assets are the farm house and farm land in his own name, valued at £1.25m. John dies suddenly without a Will leaving his wife, Jenny, and two adult children, Jim and Julian. Jim has been fully involved in the farm but Julian has no interest and, unfortunately, is in a precarious financial position with significant need of funds.

Under Intestacy Rules, Jenny is entitled to £250,000 and any personal items. £500,000 is held on trust for Jenny; she will receive income from it but the capital is ring fenced so that on her death it passes to the children. This restricts Jenny’s financial freedom and comes as a shock, as she was expecting to receive everything on her husband’s death.

The remaining £500,000 is divided between Jim and Julian. If Julian calls for his £250,000, this significantly impacts the farm and the family who must find funds to pay him. Even if Julian decides he is happy to keep the money tied up in the farm, his creditors may think differently. Suddenly the business that John had worked so hard to build is in jeopardy.

This could have been avoided if John had taken the time to sit down with his solicitor and made a Will. He could have made sure that Jenny was protected whilst also making provision for how the farm itself could continue after his death. His concerns about Julian’s financial position could have been addressed through protecting assets within the Will itself yet still making provision for him and Jim.

The moral of John’s story is to take time to think about what you would like to happen after your death. When drought or other immediate problems demand attention, it becomes incredibly easy to put your Will at the bottom of the ever mounting pile of paperwork. But a Will is the one piece of paper that your family would be grateful to see if the worst happened.

For specialist advice in Wills for farmers and landowners, contact Vicky Raynes or a member of the Birkett Long Rural Business Team on 01206 217611 or vicky.raynes@birkettlong.co.uk