Partnership agreement

[Fubar]

Need to add the wife to the existing agreement I share with my parents.
Accountant has basically said add wife , write a bit about the partnership continuing in the event of a death, and profits are shared as agreed by the partners each year.
Maybe a couple extra bits about me having overall control of the farm and decisions etc. We all have a very good relationship and my parents are in their late seventies so are virtually silent partners anyway and are happy for me to get on with whatever I want to do.
Been quoted over £1500 by a solicitor to draw it up. Seems steep to me for what is essentially a couple of pages of legal waffle, most of which is probably copy and paste.
He's got a copy of my existing 20 yr old agreement I have with my parents so I would have thought he could have just edited that.
I think he may be going into more detail than is necessary
As far as HMRC is concerned does it have to be done by a solicitor or can I do one myself and have it signed in front of independent witnesses?
Or is that the going rate and I'm just being tight?

 

[farmerdan7618]

You will only ever need a partnership agreement if something goes wrong, if something does go wrong you won't regret spending the money on having it done well.

 

[Fubar]

You will only ever need a partnership agreement if something goes wrong, if something does go wrong you won't regret spending the money on having it done well.

As in many things in life.
I would imagine though you need a partnership agreement for tax purposes if nothing else.

 

[farmerdan7618]

As in many things in life.
I would imagine though you need a partnership agreement for tax purposes if nothing else.

There is a default position in the partnership act 1890 which is what you have if there is no agreement.
It's much more about responsibilities, duties and the division of profits/assets than what HMRC want.

 

[Frank-the-Wool]

If the original one was drawn up 20 years ago then things will have changed. I would also talk to a good land agent as well as a solicitor about this, especially if land or tenancies are involved.
You will not regret spending the money in a few years time.
Also remember to update your wills to reflect what is in the partnership.

 

[Pan mixer]

Much good advice above, I too have had reason to thank goodness that we had a solid partnership agreement written during the good days when one of the partners went slowly insane. Manu unforseen things can happen. £1500 is cheap for the peace of mind.

 

[Kentishfarmer]

The exact wording of a Partnership agreement can also have implications for IHT in the future. So long as your solicitor knows what they are doing spend the money

 

[betweenthelines]

Got any brothers or sisters?

Have you got any kids?

What happens if you die before your parents?

What happens if your wife (or you) run off with the AI man?

 

[Little squeak]

The origanal question wasn't "Is a partnership agreemment a good thing?" it was "Is £1500 a reasonable amount to pay?" I would say not. It was decades ago since I was involved in a partnership but I would ask for a quote elsewhere before I paid that much.

 

[Humble Village Farmer]

Accountant said several years ago you would be better off as a a partnership.

Me - what do I have to do?

Accountant - nothing really, just tell the revenue who the partners are.

So that's what we did.

Obviously we haven't needed the legal document for anything serious. I don't know what good it would have done if we had though.

Disclaimer, I didn't know much about partnerships

 

[chipchap]

Get it drawn up. It will save all sorts of problems should a partner die.
You will also need to review your wills at the same time, or at least the solicitor drawing up the agreement will need to see the wills of all partners in order that the partnership agreement does not conflict with the wills. A partnership agreement takes legal precedence over a will.

 

[Little squeak]

This infomation was taken from https://www.gov.uk/guidance/solicitors-guideline-hourly-rates.

Seriously how long do you think it is going to take?


Guideline hourly rates

Pay band	Fee earner	London grade 1	London grade 2	London grade 3	National grade 1	National grade 2	National grade 3
A	Solicitors and legal executives with over 8 years’ experience	£409	£317	£229–£267	£217	£201	£201
B	Solicitors and legal executives with over 4 years’ experience	£296	£242	£172–£229	£192	£177	£177
C	Other solicitors or legal executives and fee earners of equivalent experience	£226	£196	£165	£161	£146	£146
D	Trainee solicitors, paralegals and other fee earners	£138	£126	£121	£118	£111	£111

 

[chipchap]

Monkeys and peanuts.

 

[Fubar]

I guess it's like insuring the farm buildings. Seems a waste of money each year but could be a saving grace one day.
And at least with the partnership agreement, it's inevitable that it will be scrutinised one unless we all live for ever.

Just seems a bit expensive when I only paid 2500 a couple of years ago for conveyancing before buying a 200 acre farm. At £250 / hour that means this will only take 4 hours less to complete.
He's offered me a choice of a fixed £1500 - £1750 fee or and hourly rate of £250.

Tin hat on but my wife and I haven't actually done our wills yet !! Both in our 40s with 2 young children.

 

[Kidds]

Tin hat on but my wife and I haven't actually done our wills yet !! Both in our 40s with 2 young children.

Sort yourselves out for goodness sake! You won't believe the misery caused should you drop down dead without warning. I do know.

 

[Fubar]

Sort yourselves out for goodness sake! You won't believe the misery caused should you drop down dead without warning. I do know.

I know. We need a kick up the bum. Up until now I've always had that " it wont happen to me" view. But I'm now of the age where I'm starting to think crickey, " I'm getting nearer to the drawing out pen", and some of my good friends have already gone.
Maybe I should speak to the solicitor and see if he can tie it all in together. Although he will no doubt have to pass us on to the Will specialist.
Out of interest, do solicitors look at the value of an estate and think ' I'll have a percentage of that". Or would they charge someone worth 100k the same as someone worth 5 million? I realise the larger estate will probably involve more work.

 

[The Son]

I too stuck my head in the sand and took the it wont happen to me attitude. Well it has happened to me and i would say if done properly this will be the best £1500 you will spend this year.

 

[Kidds]

Don't know why it should make a difference, you are not dead yet so it isn't spendable.
"I leave my estate to be divided up in the following ratios, 50% to wife, 25% each to my two children"
Makes no difference if it is £50 or £50m does it?

 

[Pan mixer]

Don't forget the Powers of Attourney things either.

As I said above you have no idea what may happen, if someone goes insane as in our case not having a Power of Attourney thing would have cost us a minimum of £10K in court if the poor chap hadn't have died.

 

[steveR]

I guess it's like insuring the farm buildings. Seems a waste of money each year but could be a saving grace one day.
And at least with the partnership agreement, it's inevitable that it will be scrutinised one unless we all live for ever.

Just seems a bit expensive when I only paid 2500 a couple of years ago for conveyancing before buying a 200 acre farm. At £250 / hour that means this will only take 4 hours less to complete.
He's offered me a choice of a fixed £1500 - £1750 fee or and hourly rate of £250.

Tin hat on but my wife and I haven't actually done our wills yet !! Both in our 40s with 2 young children.

You obviously have substantial assets... Get it sorted, even if it's just a quick holding item.

But, you know you need to do the job properly. Next wet day, make a few appointments and see some specialist Solicitors who undertstand agriculture. County town and the better outfits will be your best bet.

Ask accountant and your friends for recommendations.