Adrian Schuck, Associate Solicitor in our Birmingham Private Client Team discusses the importance of proper estate planning for farmers and individuals involved more broadly in agricultural related business.
A will is your Legacy and an essential part of your plan to ensure that your Estate is distributed in the manner you intend. This is perhaps of particular importance to a farmer, whose assets may include the farm and business to which they have devoted their life’s work.
All farmers and businesses are different but we often hear “I want to ensure that the my farm and business are passed on to those I want to inherit them, without them having to be sold” and “how can I do this and also reduce the amount of inheritance tax?”
It is here that an appropriately drafted will tailored to the Farmer’s circumstances is essential.
To allow the Farmer some control over who benefits under their Will, a discretionary Trust may be suitable, allowing the Farmer to appoint trustees who are responsible for what is distributed to which Beneficiaries, on what terms and when. This may be of particular appeal to a farmer who has concerns that certain assets may be at risk of potential divorce, bankruptcy or mismanagement.
A suitably worded letter would accompany the Will providing guidance as to how they envisage the Farm and Business should be run which the Trustees can take into account upon the Farmer’s death.
If the Farmer’s estate exceeds their inheritance tax thresholds, consideration should also be given to the availability of agricultural property relief (APR) and business property relief (BPR) so that the Farm and Business may be left free of tax under the terms of their Will.
It is therefore imperative that consideration is given to the structure of the Farmer’s Business and their ownership or occupation of the Farm at the time of making their Will in order that appropriate lifetime planning can be undertaken.
If you are a farmer, a business owner or you own agricultural property and would like to discuss any of the points raised in this article, please contact Adrian Schuck on 0121 710 5900 or [email protected]