A farm can be a valuable asset with farmers spending their lives protecting the land. In some cases, generations have worked and built-up the farm business to provide for their families. Current farm owners should consider creating a Will to safeguard their business and property for the future.
In recent research undertaken by IFAC, it was found that of the 1,700 farmers that took part in the survey, 71% had not identified a successor and worryingly, 40% did not have a Will made.
A Will is often considered something that an older person should make, however, to ensure the future safety of the farm and farm assets, experts would recommend creating a Will as soon as possible. Plan it based on current circumstances as it can always be changed.
The benefits of creating a Will include knowing that possessions and assets will be distributed in accordance with the testators (person who is making the Will) wishes. It gives the testator an opportunity to provide for family and friends, protect the future of the farm/business and reduce inheritance tax.
Firstly, every person in Ireland is entitled to create their own Will. However, a Will is a legal document and oftentimes a ‘homemade’ or ‘DIY’ Will can be poorly drafted and unclear. In these cases, the Will may become invalid. It is our recommendation that farmers seek professional advice when drafting up this important document.
If professional advice is sought, tax is an area that should be discussed. Consideration should be given to inheritance tax. The cost of professional advice when creating a Will can be small when compared to tax savings.
Before seeking professional advice there are some items to consider and prepare in advance. Farmers must consider all their estate. Not only the ‘farm’, but they should make a list of bank accounts, owned property, Basic Payment Scheme Entitlements and farm machinery. Other assets can include vehicles, livestock, blood stock, and any other personal items that may be of monetary or sentimental value. Creating a comprehensive list will help ensure certain assets will be passed on to those intended to benefit from them.
A testator will need to appoint an executor. This is a person who will handle the estate following the passing of the testator. This person should be trustworthy, honest, and needs to outlive the testator.
Next the testator could make a list of people who they wish to benefit from their Will. This should be complete with full names and state the relationship to the person. This will avoid any confusion in the future.
For those who have a Will or are in the planning stages, it is important to regularly check to see if it needs to be updated. Portfolios can change over time along with intended beneficiaries.
For those who do not a have a Will, the estate in question will be distributed according to the rules of intestacy. As part of the Succession Act 1965, the rule of intestacy determines who is to inherit and who is responsible for the administration of the estate. In many cases, this can be contrary to what the farmer would have wished for and can result with an unsuitable person assuming the role of personal representative. Failure to make a Will can be expensive, cause family rifts and could result in land, property or assets being sold.
Aisling Meehan, Agricultural Solicitor and Tax Consultant commented, ‘It is never too early to discuss succession planning on the farm and it’s worth getting all the family involved in that conversation. We have a duty to do this to adequately protect the next generation and ensure there is a viable farm there in the future. At the very least farmers/landowners should have a Will in place. I’d recommend to make a Will based on the here and now and if circumstances change you can change your Will accordingly.’
Planning for the future take time and we encourage farmers to avail of extra help when needed to free up time for it. FRS Farm Relief provide a range of services including reliable farm aid to help during busy periods. Contact your local FRS Farm Relief office for more information. www.frsfarmrelief.ie