Effective estate and succession planning will protect farming family’s bloodline and future
Farming families must be focused on planning together early to establish succession and estate plans as a united front, according to Lorna Payne, Partner in the Wills, Trusts and Probate team at Sydney Mitchell.
Speaking at the firm’s inaugural ‘Diversification and Succession’ seminar, Lorna stressed the importance of early planning so that the farming family’s eldest generation’s wishes for their children and grandchildren, the family farm and its assets, are clear and documented.
She also said that the sometimes difficult conversations about inheritance need to be had while all parties are fit and well. This is to make sure not to run the risk of the inheritance of the farming business and its assets being decided by the strict legal rules of intestacy if the mother and/or father die without having a Will and/or documents setting out their wishes for what their children and any grandchildren should inherit and what their future role and income from the farm business must be.
“The inheritance tax cap is coming,” Lorna said. “But by setting up lifetime trusts and refreshing these every seven years, families can have a highly valuable legal way to minimise or even avoid Inheritance Tax (IHT) altogether. And in turn, this can mean the family’s future and blood line are protected.”
A lifetime trust allows £1million of APR and/or BPR qualifying assets to be placed in to a trust every seven years to capture the relief and limit what is in the estate to be calculated for the APR/BPR cap.
Lorna said: “These are very challenging times for farmers. There is so much uncertainty around the financial stability for so many farmers, especially those with mid-sized farms, and farmers need to grasp the nettle and talk to advisers who understand succession and inheritance planning, as well as the vagaries of agri and rural businesses. This strategy will give them the invaluable opportunity to seek out scoping advice and create a robust and relevant estate plan for all of the farm’s finances and assets.”
As well as up-to-date wills – which should be reviewed every 4/5 years and updated to reflect any changes in circumstances and finances (such as inheritance)and lifetime trusts, Lorna highlighted other legal documents that could and in many cases should form part of a succession plan:
Deed of variation
A deed of variation is a legal document that allows beneficiaries of a will or intestacy to change how a deceased person’s estate is distributed after their death. Beneficiaries can redirect their inheritance to another person, charity, or even set up a trust, but all affected beneficiaries must agree to the changes. This tool is often used for tax planning and must be made in writing within two years of the death to be effective for IHT planning purposes.
Lasting Power of Attorney (LPA)
A Lasting Power of Attorney is a legal document that allows a person to appoint someone they know and trust (“attorneys”) to make financial and health decisions, should they lose capacity or require assistance with managing their finances in later life. There are two types of Lasting Power of Attorney – Property & Financial Affairs, and Health & Welfare. Lorna’s advice is to have both.
Proprietary estoppel
Lorna also explained the principle of ‘proprietary estoppel’. This is a legal principle that prevents a property owner from breaking a promise about property rights after someone has relied on that promise to their detriment. Proprietary estoppel is primarily concerned with property that provides a remedy when one party has relied on a promise or assurance given by another, leading to detriment when that promise or assurance is reneged on. As such proprietary estoppel claims often feature in farming family disputes over who has inherited what.
“The solution to avoiding this lies in future planning and open conversations with all family members, whether they are involved and working in the farm enterprise or not,” Lorna said.
The ‘Succession and diversification – protecting the next generation’ event was hosted by Sydney Mitchell at Becketts Farm, one of the West Midlands agri business diversification success stories, and a fourth generation family business, in November. 2025.
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