Farm Disputes.

Over the years I have dealt with many different types of disputes involving farms, which have arisen after the death of the farmer/landowner. Almost uniquely, farms provide both a home and a livelihood. It is probably for this reason, and the fact that most or all of the farmer’s money may be tied up in one valuable asset, that disputes arise.

Farms often present a twin dilemma for farm owners when they are contemplating making a will: 1) how to facilitate the continuation of the farm to the next generation(s) and 2) how to be fair to all of their children, particularly if only one child lives and works on the farm and there is a wish to preserve their home and livelihood.
The most common types of farm disputes that I have encountered are the following:

• Claims for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975.
• Probate disputes, involving challenges to the validity of a will.
• Proprietary estoppel cases.
• Partnership disputes and other issues between the surviving partners.

Claims for reasonable financial provision

Claims for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 are most often brought by the partner/spouse/civil partner, or a child, of the deceased farmer/landowner. The Act makes them eligible to bring a claim. Claims may arise, for example, where the deceased has died without a will and the application of the intestacy rules means that the spouse/partner does not receive adequate financial provision from the estate; they need additional financial provision to provide for their current and future needs. Or, the deceased makes no provision in his will for his spouse/partner because he wants to give the farm to his children from a previous relationship. The spouse may be left homeless and in need of financial provision in that situation.

A child (including an adult child) might bring a claim for reasonable financial provision if they have been excluded from their parent’s will, or given a much reduced share of the estate, to enable the farm to pass outright to the chosen beneficiary (who might well be a sibling). Alternatively, a claim can arise if a widowed or single parent has died intestate and their estate (including the farm) has to be divided equally between their children, one or more of whom may live and work on the farm while others do not. An adult child must establish that they are in need of financial provision from the estate.

In determining all applications for financial provision, the court must consider various factors which are set out in the Act, including the financial resources and needs of the applicant and their physical and mental health. It is therefore important for wills to address the financial needs of any potential applicants, such as spouses and children. If the will is prepared by a solicitor, appropriate advice should be provided to try to avoid any potential claim being brought in the future.

Probate disputes

Probate disputes arise where the validity of a will is in doubt, perhaps because there are issues concerning the testator’s mental capacity to make a will owing to dementia, a stroke, or other illness or disease. Other grounds for probate disputes are where the will was not correctly executed, lack of knowledge and approval of the contents of the will, undue influence and fraud. These disputes can often be avoided if the will is prepared by a solicitor, who is under a professional duty to take steps to ensure that the will is valid and avoid a dispute arising later on.

Proprietary estoppel cases

Proprietary estoppel claims are often considered to be the classic farm dispute and a number of farm-related cases have been published in the law reports in recent years. Someone works on a farm for many years, often for little or no pay, in the belief that they will inherit the farm in due course. This belief stems from promises or assurances that were made to them by the farmer/landowner along the lines of “Don’t worry, one day this will all be yours”. The individual relies, to their detriment, on the promises made to them. If it were not for the promises, they claim that they might have obtained work elsewhere with better pay and prospects, or purchased their own farm, although a recent Court of Appeal decision makes it clear that this is not essential in order to prove detriment. In the end, the individual does not inherit the farm or land that they were promised because the farmer decided to leave it to someone else. They bring a claim because they believe that the farmer’s conduct in reneging on his promises is “unconscionable”. If the case is made out and the Court upholds their claim, it will make an award that it considers is sufficient to satisfy the individual’s claim.

Partnership disputes

Farming partnerships often exist between family members who are involved in the same farming business. There may be a written partnership agreement but this is not always the case. A written partnership agreement is preferable because it sets out the terms of the partnership and should leave no room for dispute between the partners in the event of the death of one of them. For example, the partnership agreement should record what constitutes the assets of the partnership. In the absence of a written partnership agreement, it is sometimes difficult to establish whether the farm itself is a partnership asset or not. The farm accounts are not always clear on this issue and can give rise to a dispute. For example, if the farm is an asset of the partnership, then even if it is owned in the sole name of one of the partners, it cannot be left to another beneficiary.

In conclusion, will making for farmers requires consideration of issues such as who will ultimately inherit the farm, the partnership and partnership assets, and living arrangements on the farm. Just because the farm is a family enterprise does not mean that living and working arrangements should not be formalised. The following steps should help to avoid a post-death dispute:

• Use a solicitor to make your will.
• Where possible, deal with family expectations and consider discussing the terms of your will with family during your lifetime.
• Formalise any farming tenancies by seeking legal advice and having formal agreements prepared.
• Consider and seek legal advice in relation to living arrangements on the farm, particularly if two or more relations are living in the farmhouse, or in separate properties on the farm.
• Partnership agreements. Have a written agreement. Agree what assets belong to the partnership and record them.

In the event that a dispute does arise after death, a mediation involving a qualified mediator is a very good way of trying to resolve it.

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