The Importance Of Estate Planning For The Agriculture Sector

• Published date: 22 January 2021
• Subject Matter: Tax, Family and Matrimonial, Inheritance Tax, Wills/ Intestacy/ Estate Planning
• Law Firm: Ashfords LLP
• Author: Mr Robert Horsey

It is unfortunate but not unusual to find that following the death of a family member a dispute arises amongst those with an entitlement to or an expectation of an inheritance.

The risk of this can be best avoided - but even then not wholly eliminated - by making a Will. That is the best way to ensure that the persons' estate passes as planned. Setting out who is to inherit is also a fundamental tool for estate tax planning, particularly in relation to farming families, by which you can minimise the tax that could otherwise be payable on death.

Even with a Will in place there remains scope for disputes following death. In the context of farming families, it is not uncommon to find a claim being made where promises were made by the farm owner that others working on the farm (not necessarily only family members) would inherit the farm or part of it. Those circumstances could give rise to a claim to require the farm owner (or his or her estate) to make good on those alleged promises irrespective of what the terms of any Will may say.

In order to bring a successful proprietary estoppel claim the following must be shown:

• That a promise to a right over something was made;
• That the person who was promised the right, relied upon that promise and acted to their detriment;
• That it would be unjust and/or inequitable to allow the person (or their estate) to go back on that promise.

A proprietary estoppel claim arose in a farming context in the case of Davies and Davies [2016] where the daughter of a farming family had a claim based on proprietary estoppel. Unusually Ms Davies' parents were still alive so this was a case where both promisor and promisee could give evidence of what was said and when.

In this case the parents had a pedigree dairy farm. Their daughter Eirian Davies (who was one of three siblings) claimed that she had, over many years worked on the farm at a low wage for long hours, in reliance upon her parents assurance that the farm would one day be hers. It was recognised that the parents and daughter had an unsettled relationship and that Eirian had at one stage left the farm to take up employment elsewhere, before eventually returning to the farm. The case went before the Court on several occasions before finally being decided by...