Why more families than ever are falling out over inheritance
Once, the eldest son inherited and that was it. Now, other relatives are demanding their share in court, says Harry Brennan
Families are being torn apart by inheritance and succession disputes about family businesses. Highly publicised cases, often involving farms, have raised awareness of the legal arguments that can overturn someone’s final wishes and have led to a spate of claims in the courts. One dispute currently going through the High Court involves Clive Shaw, 55, a dairy farmer who reportedly does not like cows. He is making a claim for the family farm after a disagreement with his parents, who have written him out of their wills.
It is the latest in a series of similar legal claims made this year. Lucy Habberfield brought a claim in the High Court against her mother in January. After the death of her father, her mother became the sole owner of the family farm in Somerset, despite repeated promises over the years that Ms Habberfield would inherit when her father died. On the basis that she had devoted much of her life to the farm, working long hours for little pay and taking little holiday, she was awarded a lump sum of just under £1.2m to set up her own farming business.
John Gee made a similar claim in the High Court in April. Mr Gee, 60, had worked on the farm that had been in the family for generations until his relationship with his father broke down in the years before his death.
His father, despite alleged promises to leave the farm to John, his eldest son, left his share of the business to his other son, who did not work on the farm. John’s mother later gave him her share of the business, seeing her late husband’s actions as unjust. John Gee won his claim against his brother’s interest for the lion’s share of the farm on the basis of the promises he was reportedly made.
Thomas Dumont, a barrister of Radcliffe Chambers, said the recent increase in claims was driven by media coverage of landmark cases such as the “Cowshed Cinderella” case. As we reported in 2015, a farmer’s daughter won a £1.3m claim after her parents went back on promises that she would inherit. “We are seeing more cases like this,” Mr Dumont said. “More and more family businesses are being affected. There was a time when the will was thought to be sacrosanct, but people are becoming aware that that may not always be the case.”
Such claims are known as “proprietary estoppel” – a dispute in the transfer of ownership of an asset.
Constance Mcdonnell, of Serle Court, another barristers’ chambers, said there were three common areas of dispute: challenges against wills that were not deemed valid, challenges to inheritances where not enough provision had been made, and family business claims.
Disputes are becoming more common, she said, and can involve any family business or asset: a house, shares, even a yacht.
“People read the newspaper and realise they have the opportunity to bring these cases,” Miss Mcdonnell said, adding that they could now easily afford legal representation through “no win, no fee” arrangements or through litigation financing, where pools of investors back your claim and take a share of the payout if you win.
Mr Dumont said times were changing for older generations’ arguably outdated ideas of succession, where everything was handed down to the eldest son.
“The tough old farmer or tough old businessman, as he gets older, starts to lose control as others try to muscle in,” he said. For example, a wife might want the business to be passed to all the children, not just the eldest, and younger siblings could feel aggrieved at being left out.
Luke Watson, a partner at law firm Mogers Drewett, said: “Years ago there was a much more gendered approach, where the majority of the family business or farm went to the eldest son. Now wives and others are challenging this and causing rifts between siblings, as well as between the parents and the children.”
Your final wishes may not be as watertight as you first thought. For example, if you do not make
‘At one time the will was thought to be sacrosanct. Not any more’
a reasonable provision in your will for someone who is a significant part of your life and who relies on you financially, your last wishes can be contested.
Similarly, Miss Mcdonnell said if you induced someone to believe over the years that they would inherit or have a stake in a business, and they had devoted much of their life to the business on that basis, you would be under an obligation to fulfil that promise.
Even if you have all the legal documents in place to defend your change of heart, Mr Dumont said, if you have made a promise consistently there is not much you can do.
“Sometimes these disputes occur before someone has actually died, forcing the business owner to essentially give up his interest,” he added.
Mr Watson said families should sit down and have a frank discussion about plans for succession to avoid disputes later on.
Talking to your family is the best thing you can do, Miss Mcdonnell said, adding that in a lot of cases people complicated things by making different promises to different people in an attempt to maintain “family peace”, for example.
“In extreme circumstances, where someone has done you serious wrong or harm, or committed a serious crime that makes them unsuitable as a beneficiary, you can write them out of your will. You will need to make a strong case for the exclusion in writing – you can even make a video to support your case.”
If a claim was later taken to court, she added, this could help to sway a judge’s decision. “It remains to be seen how judges will continue to approach these cases,” she said.
As long as you understand that a claim could be made against your last wishes and you have made a documented effort to stave off that claim, there is not much more you can do, she concluded.