York Christmas is traditionally a time for families to come together, but for blended farming families the festive season can also serve as a reminder of the importance of careful planning for the future. With farming businesses being both complex and valuable, it is vital to ensure that your children – whether biological or stepchildren – are properly provided for in accordance with your wishes after you die.
You and your second spouse may both have children from previous relationships, as well as children together, so without careful planning, inheritance disputes can easily arise. However, there are ways of minimising the risks of fall-outs after your death.
Before you remarry you could consider a prenuptial agreement that clearly outlines how assets and the farm will be handled on divorce or death, setting expectations and protecting your children’s inheritance rights.
You would also need to make a new will when you remarry as remarriage nullifies any previous will. If there is no will, the strict rules of intestacy apply, meaning your estate may not be distributed according to your wishes or the needs of your loved ones on your death.
In fact, your children could receive relatively little if you don’t leave a will since the bulk of your estate (all personal belongings, £322,000, and half of the remaining estate) would pass to your new spouse on your death, with only half of what remains available to split between your biological children. If your spouse then died intestate, all your combined assets would pass to their children and your offspring might get nothing more.
Even if you do have a will drafted, you need to be careful about the kind of will you leave. For example, mirror wills, might stipulate that everything passes to your spouse on your death and then onto all your children on your spouse’s death. All the potential implications of this type of will need to be considered. A particular risk is that your spouse could change their Will after you die and leave everything to their own children. Alternatively, if they remarry, the original will would be automatically revoked and your assets would go to your spouse’s new family; you can’t ring-fence assets for the benefit your own children; and your estate could shrink if, for example, your spouse goes into care.
You could leave a bespoke Will leaving specific gifts to your own children, but the most efficient solution is to have a will trust drawn up. A life interest trust, for example, could allow your spouse to benefit from assets or income from the estate during their lifetime, with the trust property then passing to the beneficiaries of your choosing after they pass away.
You can ask someone you trust to administer the trust, but you decide which assets should form part of the trust, who the beneficiaries will be, and when the trust ends – this might be, for example, when your spouse dies, or remarries or goes into care.
Even if your Will looks watertight, inheritance disputes could still arise. For example, you could be accused of lacking mental capacity to make a will or being unduly influenced by someone in drafting it. Having a Will drafted by an experienced solicitor and asking a doctor to testify as to mental capacity can help negate such allegations.
How we can help
Farming assets are complex and valuable so as your Solicitor we will draw up your Will. We will examine how the farm is owned and, if necessary, change the way it is held to ensure a smooth transfer of ownership after death.
This Christmas, taking time to plan ahead can be one of the most valuable gifts you leave behind – ensuring peace of mind for you and harmony for your family.
For more information please contact our Family Team on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 or email law@warekay.co.uk to see how we can assist.
York –