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Who will run your farm business if you can't?
- AuthorEmma Morris
It is important to think about the future, even if it seems more uncertain than ever. Have you given any thought to your farm succession plan lately? Do you even have one? Who will run your business if you can’t?
Farm succession planning is not just as simple as writing a Will and occasionally updating it (although that is part of it). It requires a look at the bigger picture.
In addition to ensuring that they have a Will in place and that it is up to date, farmers should consider their Farm Partnership Agreement alongside the Will to ensure that there is no conflict between the two documents. In the event of a dispute, the Farm Partnership Agreement will take precedence over the Will. It is important to ensure that the two work together so that you can take peace of mind in the fact that your wishes will be respected and that conflict within the family and the business will be avoided. If you don’t have a formal written partnership agreement, then it is time to get one in place so that everyone knows where they stand.
You should make sure that you are clear what is an asset of the Farm Partnership and what belongs to you personally or what is in joint names with a spouse or other family members. Again, this is the best way to avoid conflict in the family. Even the closest family relationships can be put under strain following a bereavement, so don’t just assume that everyone in the family who gets on now will continue to get on after you are gone. The combination of grief, family rivalry and money is an intoxicating one and can lead to unimaginable heartbreak following a death. It pays to be organised so that you can ensure that your family can ride the storm without you.
As part of your farm succession planning, you should also ensure that all your land is registered with HM Land Registry. Not an easy task, but it is important to be certain what land belongs to the farm business, what belongs to you personally and what belongs to other family members or is leased to another business.
Another matter worth considering as part of your farm succession plan is Lasting Powers of Attorney. Can land be transferred or equipment purchased easily without your signature – there will be aspects of your business likely to grind to a halt if you cannot complete the paperwork?
An attorney will help to look after you when you most need it. You appoint a trusted person or people to act as an attorney for you – that is to make decisions for you and put those decisions into action if you ever feel unable to do so, either due to general ill health or loss of mental capacity. Attorneys can be appointed to make decisions on your behalf about the kind of medical treatment you might receive or to manage your property and financial affairs on your behalf. You could appoint an attorney to look after your finances to allow you to take a well-earned rest (a holiday for example), the attorney can help when you need them to.
When you choose an attorney you need to consider who is best placed form a personal point of view and also who may be able to make important business related decisions such as how the money you make from your farm business is spent. It is big decision to make and something you should discuss both with a solicitor and members of your family prior to putting anything in place.
Don’t leave this decision until the last minute. The Attorney can’t act until the appointment is registered with the Office of the Public Guardian and that does take time to process. The appointment can be made and registered at any time then activated when you need it. If you do lose the ability to appoint someone of your choosing, your family can face a long and stressful (and much more expensive) process waiting for the court to appoint a Deputy you have not chosen to fill the role.
Taking small steps to plan for the future can give you and your family peace of mind and a feeling of being at least partially in control of matters when the unexpected or ultimately inevitable happens. We are used to helping with regard to these issues and will be happy to talk through your circumstances.
For more information and advice, please contact a member of our Agricultural team on 01653 600070.