Legal advice regarding uncles estate

mdagri

Member
BASE UK Member
Location
Goole, UK
Uncle passed away 18 months ago. He was 50% partner in the farm with my father. He hadn’t got round to updating his will since having got married 3 months prior to his sudden death (massive heart attack at age 75). So he is classed as having died “intestate” with no valid will to present for probate!
Referring to a recent Farmers Weekly article it was brought to my attention that partnership assets cannot be gifted in a will.

The partnership assets in question are the farm machinery and capital account of the farming business. His half share equating to £230,000.
The land is not in the partnership and is due to be divided via a deed of partition. Whereby of the 300acres owned in order for our side of the family to retain the farm house and yard. We will end up with 100 acres. His beneficiaries 200 acres plus a derelict cottage.

The partnership document being referred to dates back to 1966 when my grandfather, father and uncle formed the partnership. Grandpa died in 1982. My uncle last year. Myself(aged51), having worked all my life on the farm, earning a wage according to “agricultural wages board”. Only in the last 3 years having been brought into the partnership on a profit sharing basis. In all this time the partnership document has never been updated? Also it wasn’t until my uncles death that my father fished this document out of a dusty draw.

Would it be classed as a valid document in a court of law? Since within this document it states that on death the remaining partners have the option to buy the deceased’s share over 10 years at 4%.
Having a fabulous relationship with my uncle. I always trusted him that he would give me a “leg up” regarding the business and assumed that his will would reflect this.

Facing the prospect of losing 2/3rds of the land (it has been offered back to rent on a 5yr FBT) it is a very bitter blow to have to pay out on the machinery and current account of the business as well. Since this will decimate the working capital for years to come!

Referring back to the Farmers Weekly article I can’t help thinking that I may be in a better position to fight this clause if the document was invalid. Am I correct?
 

Repeat

Member
Location
Cumbria
Not that my thoughts are worth anything , I think you start a new partnership when the partners change ,especially when a partner passes away
 

Bongodog

Member
If as you say you were brought into the partnership on a profit sharing arrangement 3 years ago, thats the valid partnership, problem is that from what I have read I'm sure it was all on a handshake and nothing in writing. Hopefully from your perspective the filed accounts of the partnership will show that you were 1/3 of it.
 

puppet

Member
Livestock Farmer
Location
sw scotland
You don't need a document to show there has been a partnership but it helps. Usually the other partners have the option to buy the shares once assets are valued. The land will be different. What is his new wife entitled to? Presume his share of land/buildings.
Old Chinese proverb. The best time to plant a tree was 20 years ago. Same applies to updating partnership deeds on events like death or marriage
 

mdagri

Member
BASE UK Member
Location
Goole, UK
If as you say you were brought into the partnership on a profit sharing arrangement 3 years ago, thats the valid partnership, problem is that from what I have read I'm sure it was all on a handshake and nothing in writing. Hopefully from your perspective the filed accounts of the partnership will show that you were 1/3 of it.
No not a 1/3 of it. Brought in on a profit sharing basis on the recommendation of the accountant who saw that I was doing all the work without an equity in the business. On the basis that I could build some collateral in the business going forward. Too little too late I know!,
 

Kidds

Member
Horticulture
My understanding would be that the original partnership agreement became null and void on the death of grandfather.
Pretty sure that is not how ours worked. In our case two partners have died over the years and various partners retired, partnership agreement was still valid and still is to my knowledge.
I think it is how it was written in the first place that matters and how assets and capital is divided within the agreement.

You need proper solicitors advice but take on board answers on here and do a bit of googling too, half the time solicitors seem to just make it up so it is good to have your own background of info.
 

Top Tip.

Member
Location
highland
Pretty sure that is not how ours worked. In our case two partners have died over the years and various partners retired, partnership agreement was still valid and still is to my knowledge.
I think it is how it was written in the first place that matters and how assets and capital is divided within the agreement.

You need proper solicitors advice but take on board answers on here and do a bit of googling too, half the time solicitors seem to just make it up so it is good to have your own background of info.
Fair comment it will of course depend on the wording of the original agreement. The best advice is to take advice.
 
Location
southwest
What happened when Grandad died? Did he leave a widow or any other children? If so did they get anything from his share of the partnership? Or did the two brothers just take their third share up to a half share.
 

Exfarmer

Member
Location
Bury St Edmunds
I am sorry, this is not the place you need, however well meaning our comments are. I am certain though you will get a lot of support here.
You MUST get good legal advice, it would appear that you have put your all into this farm for 40 odd years and it is only fair you get your share.
No doubt you do not want to do your uncles new wife out of her fair share and that is right. But it is critical you get good advice and that will involve your accountant as well who sounds as though he is on your side.
 
Location
southwest
Wouldn't take legal advice from an Accountant.

Especially one who seems not to have advised that this situation be properly resolved before.

I think his advice re sharing profit without clarifying asset ownership was a big mistake in legal terms.
 

chipchap

Member
Mixed Farmer
Location
South Shropshire
Would it not be the case a partnership stays "intact" when partners die but is a new one when an additional partner is added?
A partnership dissolves automatically when a partner dies, unless the partnership agreement makes provision for the death of a partner.

Another interesting quirk of law is that a Partnership Agreement takes legal precedence over the provisions of the will of a partner.
 

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