21 June, 2011

A blog by Sue Savill of Ashfords Solicitors.

With the next generation of the Royal Family embarking on married life, attitudes towards inheritance and succession issues may be changing. 

A recent survey by Chartered Accountants, Saffery Champness, for Country Life Magazine has found that more major land owners are now prepared to leave their estates to their eldest child regardless of gender, and that more wish to make some provision for their younger children. 

There is a proposal being considered by the Government that Prince William's first child with Kate Middleton would become his heir, regardless of gender. If this is a move away from primogeniture - where the eldest son inherits - then the Royal Family will reflect what is already happening throughout the country. 

Many large estates have become complex and diverse businesses, and the survey found that the issue of succession planning was a very real one for many families. Almost half of those surveyed felt that it was important to consider the ability of the designated heir as well as issues of fairness and equality amongst their children. 

Parents appreciated the difficulty of weighing up the differing merits of the children against the needs of the business.  This is a sensitive area and whilst 61% of those surveyed wanted their estates to remain in the family - and 71% had gone so far as to identify an heir - very few had plans in place to develop their heir and their ability to run the business. 

The same principles and concerns apply to many farming families or owner-managed businesses in the South West.  Parents want to ensure the continuing success of the business, as well as to provide for all their children.  These two aims need not be mutually exclusive, provided the family thinks ahead to likely eventualities.  

Take the case of a typical farmer who has three children: one of the children farms with him, the second child is married to a neighbouring farmer's son, and the youngest daughter has a successful career in London.  The farmer does not want to overburden the farm by making his son buy his daughters out, but does not want to be unfair to his two daughters either.  There are a few options he could consider; it might be possible to carve out certain assets to leave to the daughters - perhaps a field with hope value or a barn with potential for development.    The farmer could also help during his lifetime, using gifts - perhaps a cottage - or putting life insurance or another investment in place to pay out to the daughters on his death, but this takes foresight and long-term planning. 

There are any number of options which might suit the differing needs of each individual family. There is only one certainty, and that is that dying without a Will in place is not effective planning, as the Law which then applies is very inflexible and can be difficult to adapt. 

Ashfords' Trusts and Estates Team can assist on any matters regarding a Will or Trust. For taxation and estate planning advice please contact Michael Alden at the Exeter office on 01392 334041, Sue Savill at the Taunton office on 01823 232313 or Rachael Crocker at the Tiverton office on 01884 203088.

Sue Savill heads up Ashfords' Trusts and Estates Team in their Taunton office. Sue advises on wills, powers of attorney and estate planning, including tax mitigation and the administration of estates. She has a particular interest in advising parents or carers of children with special needs, and is a member of Solicitors for the Elderly.

Ashfords LLP is regulated by the Solicitors Regulation Authority.  The information in this note is intended to be general information about English law only and not comprehensive.  It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.

 

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