PARTNERSHIP NEWS
The future won’t take care of itself Succession planning and asset protection are important to agricultural families. Valuable assets are passed down through generations and protecting the family legacy is vital. In any family there can be tension over who gets what, but in farming families the stakes can be high and the issues difficult.
their parent’s will, although claims
A common misconception is that leaving a will and holding assets in a trust, prevents claims against estates. Even with a well-devised and well-intentioned succession plan, claims against estates (and trusts) can be made. Avenues include: the Family Protection Act (FPA), the Law Reform Act (TPA), the Property
implicitly or explicitly promised them
are open to partners, grandchildren, stepchildren and occasionally parents. In an agricultural context, often claims are made by the child who left the family farm to live in the city, with the farm left solely to the child who stayed and worked on the farm. Under the TPA, anyone can claim against your estate on the basis that you compensation from your estate for work or services provided. These claims are common in farming families, where someone has agreed to provide work for free, often based on a verbal promise that they’ll be ‘sorted out’ when
(Relationships) Act (PRA) and the Wills Act.
someone passes away. While there are
The FPA enables family members to make claims against an estate on the basis that a moral duty was breached, in failing to provide for them in the distribution of your estate. The extent of the moral duty is dependent on the nature and degree of the relationship. The most common claim is by children who have not been provided for in
can be costly to litigate and delay the
often evidential limits to TPA claims, they distribution of the estate. For those married, or in a de facto relationship, a partner has an option under the PRA to seek an equal division of relationship property, or to take their entitlement under the will. It is not uncommon for disputes to arise in subsequent relationships. Care needs
The future won't take care of itself. WWW.FARMLANDS.CO.NZ
to be taken to ensure that succession planning allows for the possibility of the PRA being invoked. Arguments over invalidity arise where an allegation is made that the person who made the will did not have the capacity to do so, or that the will does not meet the legal requirements (normally the onerous execution and witnessing requirements). Section 14 of the Wills Act can be invoked by a family member, or executor, to validate a will that would not otherwise meet the requirements. This includes informal wills, notes recording 'testamentary intention' and wills that weren’t signed or witnessed correctly. Most of the above can be avoided with a well-considered succession plan. For complex company, partnership and trust structures, it is essential to consider these matters early on to avoid disputes or issues that may arise. Wynn Williams regularly advises on succession planning and disputes relating to estates. If you’d like to know more or to discuss your situation get in touch. Article supplied by Shane Campbell, Partner and Matt Rhodes, Solicitor, Wynn Williams
We are delighted to partner with Farmlands in offering all Shareholders 15 minutes free advice over the phone and a 7.5% discount on all legal fees. Simply call us on 09 300 2600 (North Island) or 03 379 7622 (South Island) or visit www.wynnwilliams.co.nz/farmlands for more details.
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