Farming family disputes are on the rise. Alex Burch and Lauren Godfrey – our specialist contentious probate solicitors in Buckles’ agricultural law team – discuss the various factors impacting farming inheritance disputes and what you can do if you are facing a potential legal battle.
Inheritance disputes can impact people from all walks of life. However, disputes between farming families are becoming increasingly prevalent due to the complexity of the agricultural business structure, the land and assets involved and a lack of proper succession planning. When family tensions and broken promises are also added to the mix, farming inheritance disputes can easily arise – regardless of whether the current farm or landowner has passed away or not.
Inheritance disputes involving agricultural assets and businesses can be subject to claim based onthe legal principle of ‘proprietary estoppel’. This legal principle demonstrates the complexity of cases involving farming families and is different to other types of inheritance dispute claims e.g., the Inheritance Act 1975 or claims against Will validity (although each of these types of claims are used in family farming inheritance disputes as well). Read on to find out more about farming family inheritance disputes involving proprietary estoppel and what your legal options are for resolving them.
What kind of issues can lead to an inheritance dispute in farming families?
Inheritance disputes in farming families can occur for a variety of reasons. One common cause is the failure to properly create or update estate planning documents. If the head of the family business dies without a valid Will, trust or succession plan that outlines how the estate should be shared between beneficiaries, then matters between family members can quickly become contentious.
However, some inheritance disputes can even arise before the business owner has passed away; and there have been cases where family members have brought claims against their still-living relatives for backtracking on promises to leave the farming businesses to them as their inheritance. Much of the time, these family members have sacrificed their finances and/or years of their lives working at the business for long hours and minimal pay on the basis that they will eventually be rewarded with ownership – which is where a legal concept known as proprietary estoppel comes into focus.
What is proprietary estoppel?
Proprietary estoppel is a legal doctrine often seen in the agricultural arena that prevents a person from going back on their promise to transfer property or some other benefit to someone else. It allows individuals to claim in equity that the promises should be made good, if the promise maker refuses to fulfil their end of the obligation.
However, to be eligible to sue on grounds of proprietary estoppel, the person seeking a remedy must not only be able to prove that the promisor made a binding promise that they did not follow through on, but that the promisee has relied on this promise in good faith and as a result, has suffered detriment as a result of its breach.
What evidence can be used in farming family dispute and proprietary estoppel cases?
To prove the existence of a promise to inherit an agricultural business or land, evidence can be in the form of both written documents and/or oral testimony.
Written documents can include contracts or agreements, letters, emails, text messages or other types of written communication. Whereas witness testimony involves witness statements from individuals close to both parties, who can support assertions about assurances made between the parties and who may need to give live evidence in Court. In addition to this, further correspondence between both parties during the legal process can also be used as evidence should the case later go to trial.
It is also important that claimants seeking a remedy using proprietary estoppel can provide detailed information about their circumstances and how they have suffered detriment following the promise being withdrawn.
Can farming inheritance disputes be avoided?
Whilst you cannot completely avoid inheritance disputes potentially arising, there are steps that can be taken to reduce the risk of a dispute happening in your family.
If you are the owner of the agricultural business, it is vital that you have created a Will that expresses what will happen to your agricultural property and assets when you pass. We would also advise that your family members and other interested parties (such as business partners) are made aware of what your final wishes are so that any grievances can be addressed and resolved as soon as possible.
If you are planning to pass on your agricultural business or farm – whether it be during your lifetime or after you die – then it is also important to set up a succession plan that outlines who will take over the ownership and running of your business after you retire or pass away. For succession planning, we advise seeking guidance from a legal and other professionals experienced in the agricultural industry, who will be able to help you navigate the difficult conversations with those close to you about the future of your business whilst also drafting the relevant binding legal documents (e.g., partnership agreements) and ensuring correct legal processes are adhered to.
If you are a child working in a family farming business or a non-relation worker who has been promised agricultural land or assets, then it is vital that you discuss having legal paperwork drawn up that will protect your position as soon as possible. If this request is not met by the other party, then you should speak to a specialist agricultural lawyer, who can advise you on your available options.
What can be done to resolve farming inheritance disputes?
When looking to resolve a farming inheritance dispute, it is advised that both parties first try to reach a mutually beneficial solution outside the Court. Not only will this make the process less stressful and contentious for all parties involved but will also help reduce your total legal costs.
In cases where initial negotiations do not lead to an agreement, there is the option to employ other dispute resolution methods such as mediation or early neutral evaluation, which can offer a third-party perspective on the situation and provide further guidance on legal and financial obligations relating to the inheritance dispute.
However, should a resolution still not be met by these methods, then Court proceedings may be necessary to resolve the farming inheritance dispute. Both parties will be expected to have comprehensive evidence to present to a judge, who will make the final decision on whether the claimant has a valid case and what (if anything) they are entitled to.
How to make a legal claim for a farming inheritance dispute
When preparing a proprietary estoppel claim in farming family disputes, the claimant must be able to prove three elements:
- A clear promise or assurance was made. The claimant must be able to prove that the owner of the agricultural business or land had promised them land, a stake in the business or another type of asset. Proof that this assurance was made can be provided through voicemails, text messages, letters or emails. If the promise was made verbally, then key witness testimony and communications between each party’s legal representation can also be used as evidence.
- The promise or assurance was relied upon. The claimant must show that they acted in a way of reliance on the promise, most usually that reliance will have benefitted the agricultural business on the basis that the promise would be adhered to ,for example, working long hours or for low pay for the business, investing their own money into it through purchases or development, building their residence on the farming land due to a belief they would later inherit the land ownership.
- The withdrawal of the promise has caused the claimant significant detriment. Claimants can prove detriment through the loss of their personal time, finances and potential earnings. Some examples of this include:
- Loss of pension and low pay whilst working for the agricultural business
- Loss of time from working long hours at the business
- Loss of money spent as investments or for maintenance costs towards the business e.g., purchase of farming equipment, hiring of contractors, property development.
If the Court finds the case to be unjust towards the claimant, , then it may rule in the claimant’s favour due to the withdrawal of the promise being deemed unconscionable.
Prior to making a claim on the grounds of proprietary estoppel, it is highly recommended that you seek legal advice from a contentious probate solicitor experienced in dealing with farming inheritance disputes, as they will be able to assess the likelihood of your claim being successful and ensure legal procedures are carried out correctly.
