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25 Spring / Summer 2019 Aspects of Land
“Parents might find it
impossible to tell a child
they don’t want to include
their spouse in a business
plan, but I wouldn’t”
At what point should a family start
talking to the children about succession?
Matthew: Families need to be underpinned
by honesty and transparency. I don’t think
you can start too young. I’m not saying
talk to an eight-year-old about the burden
of wealth, but get them involved in family
decision making, working things out with
their siblings and then, when it comes
to making important decisions, they
understand how to make them together.
Clive: I think it’s important that children
grow up with a long-term understanding
of what wealth means and the
responsibilities it entails. If someone is
spoilt and entitled when they’re 10, that
won’t change. They’ll still be spoilt and
entitled when they’re 80.
Matthew: Also, conversations are often
better in principle than in person. If you
sit down with your 20-year-old child
and discuss the importance of a pre-
nuptial agreement, they will very likely
understand and say: “That’s fine”. But if
you wait for that conversation until you
have a 27-year-old who has just announced
their engagement, you make it personal.
Who should be involved
in family discussions?
Matthew: The simple answer is “adult
family members”. But every family has a
different definition of what an “adult” is
and even what a “family member” is. Do
spouses count? What about step-children?
There’s no right and wrong answer but as
long as the family has a solid idea of what
its purpose is then all else flows from that.
Clive: Again, having a third party there
can be very useful for broaching tricky
discussions without it becoming personal.
Parents might find it impossible to tell
a child they don’t want to include their
spouse in a business plan, but I wouldn’t.
If your assets are land or a country
estate, how do you explain to your
younger children that they won’t
be inheriting them?
Clive: This is where family discussions are
so useful, so that everybody understands
the family’s purpose, and realises why
equal shares isn’t an option. If a family
agrees that its purpose is to conserve the
heritage and legacy of a family estate, then
everybody can accept that dividing it into
three does not serve that purpose.
Matthew: However, although primogeniture
might make it simple to say who inherits,
it’s important to look at who has the right
skills for the job. Even if an oldest child
will inherit a title, if they don’t embrace
all four pillars of the family’s capital, they
might not be the right person to take the
family assets into the future.
Clive: Or if they’re too risk averse, which
is often a trait of eldest children, then
they might not be right for the role. An
abundance of caution keeps you standing
still, which is OK for a moment, but you
can’t do it forever. Being a younger child
doesn’t necessarily mean you won’t be
taking on the family assets.
Should everything be written down?
Clive: I would suggest creating a written
family constitution as it just helps avoid
misunderstandings and maintains a focus.
But the most important part is definitely
the discussion that goes into that
document, talking things through.
Matthew: Sometimes the process of
communicating is enough. If it brings
families to reach an understanding
that’s a really good “de-risker”. Seeking
agreement is the next step on.
n If you would like advice on succession
planning, contact Clive Beer, London,
020 7877 4724,
WHEN SUCCESSION
GOES WRONG
Caroline Shea QC is a property
litigator for Falcon Chambers
and knows all too well what can
happen when families fight. As
Clive Beer says: “If you’re going
to see her, you know things
have gone terribly, terribly
wrong.” She tells us why some
families fall out and what the
consequences can be.
“There is something in law
called ‘proprietary estoppel’,
which is when courts get
involved to decide who should
own a property, even if that goes
against the wishes of somebody’s
will. It’s the fastest growing
area of property litigation, and
has seen some vicious disputes
played out in the courts.
“I worked on a case last year,
where the son, Steven – now
in his 50s – had always worked
on the farm that belonged to
his father and uncle with a
verbal understanding that one
day he would inherit it. He had
never bought his own place
and had turned down other
opportunities for work because
of this understanding. His uncle
retired and left him his share,
but his father kept on working
even though he was developing
dementia, which meant he made
mistakes that Steven had to
correct and this took a toll on
their relationship. The mother
stoked the problems between
father and son and persuaded
the father to change his will so
that their daughter inherited
the farm despite the verbal
understanding that Steven had
based his entire life around.
“Understandably, Steven came
to see us. We won the claim,
but it has come at a huge cost.
It took five years out of their
lives, the relationship between
mother and son is destroyed,
and altogether the costs ate up
almost half of the farm’s value.
“If this family had sat down
and made a written agreement,
it could have avoided a lot of
this pain. It’s not necessarily
contractual, but it is good
evidence of intentions if a
dispute arises. And it lays out
on the table what everyone’s
expectations are, which removes
peoples’ secrets and suspicions.
“Families can lose everything
by going to court, and that’s
both sides, literally everything.”
Caroline Shea QC
“A written agreement
lays out what everyone’s
expectations are, which
removes people’s
secrets and suspicions”
BEN WRIGHT