ORLANDO BRIDGEMAN, who is assistant solicitor with Crombie Wilkinson in Malton and specialises in private client and agricultural law, looks at the issues surrounding wills

FARMERS are notoriously reluctant to make wills, which is unfortunate because they are a section of the community who stand to benefit from having a well-considered will in place. In fact, 70 per cent of the population in England die without leaving a will so those who do make wills are in a minority.

What happens when someone dies without leaving a valid will? This is known as “intestacy”, and the estate of the “intestate” passes according to an order laid down by law. The rules changed in October last year.

Where the deceased leaves a spouse, the spouse will receive all of the deceased’s personal possessions and everything up to £250,000. If there is more than £250,000 and the deceased left children as well as a surviving spouse, the balance is divided between the surviving spouse (who receives 50 per cent) and the children (who have to share the remaining 50 per cent).

Where there is no surviving spouse, there is a fixed order of relations who are entitled to the estate. This starts with children, then parents, then siblings, then grandparents, and finally uncles and aunts or cousins. Where no relations can be found, the estate passes to the Crown.

It will be seen that these rules are particularly unfair to unmarried partners, or "common law" husbands and wives. These people will receive nothing even if they had lived together for decades. Everything including the family home could pass to some distant relation. There are ways for the partner to apply to court to remedy this unfairness, but there is inevitably delay and expense in doing this.

It is not unusual for farmers to assure a particular child, "this will all be yours one day", a statement which appears with surprising regularity in court cases involving family disputes after the death of a farmer (the cases themselves appear with surprising regularity in the courts).

However firmly the farmer may intend one particular child or grandchild to inherit, his statement is virtually worthless if it is not backed up by a will. When the value of the farmland and business are seen in the cold light of a farm valuation after the farmer’s death, the agreement of those family members who stand to lose out can evaporate and a miserable court saga can follow.

Intestacy can also arise by accident. Marriage automatically revokes the wills of newlyweds, and so you can become intestate even though you have written a valid will but later married.

Given the rise and rise of land prices, farmers are usually sitting on a valuable asset. Some of my farming clients calmly say, “I don’t need to do any estate planning because my farm will not be taxed when I die.” We would usually advise farming clients to “lock in” agricultural tax relief by handing their farming assets to the next generation rather than to their spouse on their death. Dying intestate means farmers miss this opportunity, and agricultural tax relief may be withdrawn by a future government.

The intestacy rules can also conflict with the rules applying to succession in a farming partnership or company. Dying intestate can cause complications with the farming business, even to the extent of forcing it to close. Solicitors should prepare a will and make sure that it complies with the governing rules of the business – or change the rules of the business to make sure the will is effective.

If you need assistance with this or any of the issues raised above, Crombie Wilkinson’s agriculture team in Malton will be able to help with both the will and the commercial planning aspects. For more information, phone 01653 600070.