Most parents want to leave their estates between all their children equally but there may be reasons not to do so, especially in farming families.
Primogeniture is the right by law or custom of the firstborn (usually male) to inherit the entire estate to the exclusion of the younger siblings.
Made popular by the Normans as a way of keeping their landed estates intact, the firstborn son inherited the estates, titles and positions of office. This left the younger sons with no prospects of inheriting obliged to seek careers elsewhere. The good joined the Church, the brave joined the Army and the rest went into Government! Plus ca change.
However, the traditions of primogeniture go back much further than the Normans. The hairy Esau sold his ‘birthright’ for a hearty meal and the smooth Jacob tricked him out of his father’s ‘blessing’ by donning a goat’s skin.
Perhaps not on such a biblical scale, farmers face a similar dilemma. Do they leave the farm to all their children and see a lifetime’s work fall under the auctioneer’s hammer or do they favour the farming child resulting in ill-feeling amongst the disinherited sons and daughters?
The decision is made more complicated by the fact that the farming child may have given much of his or her working life helping to run the farm. In addition many farms, whilst worth a fortune, provide insufficient income to support more than one family.
The good news is that it does not have to be ‘all or nothing’. For instance, I recently acted for a farmer in his eighties whose son was in his late fifties. None of the grandchildren wanted to farm. Therefore, by giving the son a farm business tenancy, we protected the son’s income until his retirement and secured agricultural property relief. The farm then passes to all the children on the retirement of the son.
Another useful structure is the limited company. This allows shares to be given to all the children whilst profits can be distributed to the farming children as directors’ salaries. There may be no immediate benefit to the non-farming children but at least they know if the farm is ever sold they will share in the spoils.
Thankfully, after twenty years of fear and hatred, Esau and Jacob were reconciled showing the power of love can overcome the love of power. I cannot help thinking, however, that much heartache could be avoided if a properly-constructed and thought-out Will was prepared in the first place.
William Kinread is a partner at Raworths LLP and a solicitor specialising in agriculture, wills, trusts and probate. To contact Raworths telephone 01423 566666 or visit our offices at Eton House, 89 Station Parade, Harrogate, HG1 1HF. Alternatively, you can email email@example.com.