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‘Plan for future’ warning for rural businesses

Napthens - March 7th 2018

A legal specialist in inheritance disputes is warning farming and agricultural business owners to properly plan for the future following a high-profile court case which saw a woman awarded more than £1 million in damages.

In the case, a woman in Somerset spent more than three decades working on her family’s farm, reportedly for low pay and with just a few weeks holiday in that time, under the impression that she would one day take over the business.

When her father passed away, this did not happen, prompting her to bring a claim which was opposed by her mother.

The High Court ruled in the daughter’s favour, awarding her with more than £1million and deciding that her father’s assurances were not ‘idle or casual remarks’ and she was meant to inherit part of the farming business.

Stephanie Kerr is a solicitor and specialist in probate disputes in the Litigation & Dispute Resolution team at regional law firm Napthens. She said the issue is one that her team has seen before in rural businesses, but that good succession planning can help reduce this risk.

She explained: “There is no doubt that family businesses are more likely to be affected by these type of claims, especially farming and agricultural businesses.

“Because of this, succession planning is important to ensure that the business is carried on in the most appropriate way following the death of a stakeholder in the business – for instance ensuring that other family members involved know exactly where they stand, legally.

“If promises or representations are made which are not fulfilled, there are options available to a person who has not received what they expected, which is what has happened in this case.

“It is vital to seek proper legal advice on the issue.”