Promised the Farm? You need a Written Succession Plan!
We often hear about a son or daughter who has devoted their life to the family farm, forgoing career or other financial opportunities in order to draft a usually low wage in anticipation of a reward in the future –
an oral promise that they will “get the farm” when the parents retire or die.
Is this you?
In the absence of a written succession plan, there is an uphill and very expensive fight in store for a farming child when a parent’s promise is broken.
It can be broken when parents retire and fail to take steps to transfer a property as promised. Sometimes it is broken when the parents die and their Will does not reflect their promise.
In such cases, there are avenues available for the child such as:
– Where the promise is broken during the parent’s lifetime, an equitable claim of “estoppel” (ie parents are stopped from saying their promise is unenforceable) or an equitable claim of “constructive trust” (ie parents hold the farm on trust for the child); and
– Where the promise is broken when the parents die, a family provision claim.
The courts have recently considered these, and have awarded the farm or cash to the farming child: Giumelli v Giumelli (1999) 196 CLR 101; Eckersley [2016} WASC 154; Currie v Currie  WASC 312… and many more cases. However, for the farming child, it is an expensive exercise, uncertain and family breakdowns occur.
If you have made promises to your child that they are to receive the farm, or your parents have promised you the farm, please see your professional advisers who can assist with succession planning. Make sure you have a written succession and estate plan!