Farms are valuable assets and are complex businesses to operate. Every day you make numerous decisions about the farm that can impact its future success or growth.
It makes good business sense that you should want to make decisions concerning the future of your farm to protect what you have already spent years building, and often includes the efforts of previous generations. Many farms get handed down through generations, and future planning to ensure this continues is vitally important.
The best way to ensure your property is distributed after death in accordance with your wishes is to make a will.
Making a will is often something we think of as something to do when we get older, but it is something every farmer should look to do now.
What happens if you have not made a will?
If you have not made a will, your estate, which includes the farm, will be distributed according to the rules of intestacy.
The Succession Act 1965 determines who is to inherit and who is responsible for the administration of the estate. In many cases, this can be contrary to what the farmer would have wished for and quite often results in the most unsuitable person assuming the role of personal representative.
For example, if you die without a will leaving a spouse and children, the spouse will inherit 2/3, and the remaining 1/3 will be divided equally between the children. This can create huge difficulties for the spouse, especially if the children are under the age of 18.
Considerations for making a will
Making a will should be thought about and planned for and should be considered by all age groups, especially couples with young children.
Your estate comprises not only of your property but personal items, bank accounts, to name just some assets, and in the case of a farmer, it also includes single farm payments, livestock, bloodstock and farm machinery.
Your will should be carefully drafted to ensure that those assets pass under the will to the person intended to benefit from them.
Taxes and wills
Consideration should also be given to inheritance tax, and proper tax and estate planning advice should be obtained when putting a will in place.
The cost of tax advice and legal advice for making your will, can be a small cost to pay when you consider the tax savings.
Tax changes occur with virtually every Finance Act nowadays, and farmers who have particular tax planning needs should review their will annually.
All farmers should have a valid will in place and execute an enduring power of attorney to ensure their loved ones are provided for and to ensure their wishes are carried out.
In our previous article, we discussed an enduring power of attorney in detail and what it means to have one in place. You can click here to read this recent article.
The person who makes the will, in legal terms, is referred to as the testator. Meanwhile, an executor is an individual chosen by you to deal with your estate following your death.
Of course, it is advisable to appoint a person who you not only trust but who is also likely to outlive you.
The content of your will depends on the complexity of your situation. For instance, a person who owns multiple businesses, has a farm or has numerous investment properties may be more complex than, for example, a person whose property portfolio consists solely of his or her family home.
It is advisable to carry out a certain amount of preparation before meeting with your solicitor.
This may include drawing up a clear and concise list of individuals who you wish to benefit as well as a separate, comprehensive list of your assets, policies and liabilities, double-checking to ensure all are included and up-to-date.
What to watch out for
- It is vitally important that your instructions are crystal clear. Any ambiguity as to precisely which property or relative being referred to in a particular sentence or paragraph can result in a will being challenged or found invalid. There may even be confusion regarding the identity of one of the beneficiaries in the will. For instance, you may make a gift to your niece Sarah. However, you have two nieces named Sarah. Perhaps one on each side of your family, if married. Therefore, close attention should be paid to all information included in your will, particularly names and to the description of relationships.
- Even if a testator’s wishes are clear, there are instances where they may be incomplete. For instance, if a testator has only made reference as to how some of their property is to be distributed upon death but there exists additional property which has not been accounted for at all, this will create what is described as a ‘partial intestacy’ whereby the distribution of the remainder of the property will have to be governed by the laws of intestacy. This distribution scheme may not reflect what the testator would have wanted.
- If you are the owner of property in another country, it is advisable to make a different will in that country in order to account for differences in the law of succession between countries.
- While your will may be stored in a location of your choice, it is strongly advised that your solicitor stores the will on your behalf. This can avoid a will being misplaced and kept under lock and key in fireproof safes, a level of security it is unlikely any other facility could provide for.
Amend your will
Oftentimes, it is necessary to amend your will several times throughout your life. Failing to do so, will, in turn, result in the failure to take into account changes, which may have taken place since your last draft.
Additional children may have been born in the interim. If your will has not been amended to take account of this, your children may fail to benefit upon your death.
Your asset portfolio may change over time, requiring an update to your will. Your intended beneficiaries situation may also have changed.
For example, a child’s marriage may have broken down, or beneficiaries move abroad or pass away. In any of these circumstances, you may wish to amend your will to ensure that the longevity of your family farm and assets are adequately protected.
Farms are valuable assets that are often handed down over generations. This can often mean that there is also an emotional connection to the land and assets involved.
Having a valid and up to date will is a vital tool to assist in securing peace of mind for the future.
You can then rest assured knowing that regardless of what you might be faced with in life, your loved ones will be provided for and your assets distributed in accordance with your wishes.
Emma provides practical and commercial advice to help clients put a framework in place in the event of their death.
For further information, or to enquire about making a will, you can contact Emma on 021 4626900.
CKT is a leading Irish law firm employing over 70 professionals in Cork and Dublin. CKT has a strong reputation for providing strategic legal advice and superb service.
Disclaimer: The information provided in this article is as a general guide only. You should contact a solicitor for legal advice specific to your situation.