Terry Pratchett, the well known author of fantasy novels once wrote that “those of us with dementia need a little help from our friends”. There are around 800,000 people in the UK living with dementia and for people over the age of 65, one in fourteen are affected. In addition, a survey last year revealed that 92% of UK farmers under the age of 40 rank poor mental health as the biggest hidden problem facing farmers today. Those working in the countryside especially spend long hours working in isolation and this can lead to a lack of support or a lack of other people noticing mental health symptoms.
Families are increasingly faced with the issue that a key and loved member of the family is suffering alongside the bigger picture of doing what is best to protect the farm and the business for future generations. So, faced with a situation like this or the prospect of such a situation what can be done to help you?
This might sound obvious, but the key point is do not bury your head in the sand and hope the situation will not get any worse. Talk to someone and ideally get some decent legal advice. This should be from lawyers who really understand the complexities of farming businesses. You need someone who has the core knowledge of how a farm is generally run and the experience to guide you and the family through the intricate complexities of succession planning and asset protection.
Secondly, consider putting in place Lasting Powers of Attorney (LPA). This is a legal document that allows a person to give another person or persons (the Attorneys) authority to make certain decisions on their behalf. There are two types: a Property and Financial Affairs LPA which allows your Attorney to deal with your finances, such as managing the business, paying bills and looking after your investments; and a Health and Welfare LPA which allows your Attorney to make care decisions and (should you wish) the giving or refusing of consent to life-sustaining treatment. The Property and Financial Affairs LPA is particularly useful, since it can be used even if you have the capacity to act yourself. The LPA allows you to still make decisions that your Attorneys would otherwise carry out. In other words, it allows your Attorneys to make decisions on the bad days when you are not able to do so yourself. If the family find themselves in a situation where someone has lost capacity and there is no LPA or the old style Enduring Power of Attorney in place, then it would be necessary for an application to be made to the Court of Protection for an order to appoint somebody to act on their behalf. This is a very costly, stressful and time consuming process. Ultimately with the time delays, you could be endangering the future viability of the business that you and your family have spent a lifetime building.
Thirdly, check or get your lawyer to check the legal documentation. This includes not only the title deeds to the farm but also the documentation relating to your farming business whether it is as a sole trader, partnership or through a company structure. You need to seek advice on the best way to hold the title to the property and, if you still have capacity, whether that structure ought to be changed. Similarly with the business, careful consideration needs to be made on the best way to structure the business so that if you were to lose capacity the business may still carry on. In that context, for farming partnerships in particular, make sure there is a written and up to date farming partnership in place.
Fourthly, get your Wills reviewed regularly. It is important to bear in mind that just because someone has been diagnosed with dementia does not necessarily mean that he or she cannot make a Will or amend an existing Will through a codicil. It will depend on whether the person has testamentary capacity. This is a decision a solicitor will make, often in conjunction with medical staff. It is also important for other members of the family to review their Wills since you do not want to add to any problems by leaving outright assets to a person suffering from dementia. In these cases, a trust might be a suitable vehicle to hold these assets for the benefit of the family.
Finally, seek advice on the availability of Agricultural Property Relief (APR) and Business Property Relief. It can be difficult for any farmer to continue to work in the last two years of their life and maintain an active interest in managing the land and this is particularly an issue if the farmer is suffering from a mental illness. Yet, HMRC requires you to be actively involved in order to protect the availability of APR. Each case is different and that is the reason why specialist advice should be sought, particularly around the issue of the farmhouse.
By thinking about these issues early and with careful preparation coupled with the right professional advice you will be able to ensure that all your hard work in building up the family farming business will not be lost to future generations.
How Moore Barlow can help
Our expert Private wealth and Rural law teams at Moore Barlow can provide you with peace of mind through supportive legal advice that is tailored to your individual situation.
As a rural property landowner or farmer your legal needs will be diverse. Our in-depth knowledge of the rural community means we can support you with all your legal requirements.