Succession Planning
27 November 2025Succession planning is an essential part of your farm business management, and with a proactive approach will help to protect your farming assets for the next generation.
It’s never too early to start a conversation about succession – after all, with the right financial and legal advice it may not be as difficult as you imagine.
This article provides a high-level overview of key points you should consider for your farming business, and complements a FAS TV episode with Burness Paull solicitors in Edinburgh which you can view here:
Always seek specialist advice from your accountant and/or solicitor before making any changes to your farming or crofting business.
Wills
Making a Will is one of the most important things we can do. A Will is a document that narrates an individual's wishes and determines how your assets will be shared/distributed upon your death. Failure to make a will can pose major difficulties for those left behind and your estate could be distributed according to the law rather than your own personal wishes.
It's never too early to create a Will and it should be updated regularly, at any major life changes, such as births, marriages, or changes to business structure.
Considerations when preparing a Will include, but are not limited to:
- Who is to be appointed as Executor of your Will – they should be trustworthy individual(s) responsible for looking after your estate upon death.
- What assets do you have, such as farming assets, shares, property, and/or personal savings, to allow appropriate distribution and enable your solicitor and accountant to provide informed advice on inheritance tax and procedures.
- Do you have any specific bequests, such as personal items or shares that you want to leave to a specific individual?
- Are you part of a Partnership or Limited Company? Your Will should include clear instructions on what is to happen to your share of the business. This helps ensure the business can continue to operate smoothly and according to your wishes after your death.
- Any special arrangements you wish for your funeral.
- Do you require Trustees where there is an inheritance to a younger family member such as a grandchild? The Trustees should understand the asset that is being put in Trust, such as a farm, so that it can continue to operate until such time that the child is old enough to inherit as per the Will’s instruction.
Preparing a Will which includes agricultural assets can be quite complex and should ideally be done with advice from a specialist agricultural solicitor.
Power of Attorney
A Power of Attorney (POA) is a legal document that allows a trusted person to make decisions on your behalf if you are no longer able to do so yourself. It can be tailored to your wishes and must be prepared when the individual is of sound mind to make these decisions.
There are two types of POA. A welfare POA covers decisions about your health and personal wellbeing, such as medical decisions if a doctor has assessed you as incapable. A financial POA covers decisions relating to money, property, and business matters such as making payments from a bank account, particularly important for farming businesses where cashflow is required to pay staff, paying for invoices, purchase of animal feed, fuel etc. Many farming families choose to have both in place to ensure that the business and personal affairs can continue without disruption.
Your chosen ‘attorney’ should be someone you trust, such as a family member, friend, or your solicitor, and more than one person can be named.
As mentioned above, a POA can be bespoke, and an ‘attorney’ can only conduct instructions which you have specifically expressed in writing. If there is no written POA then family or friends can apply to the court for a Guardianship Order to make decisions on your behalf, but this process can take considerable time, involve legal costs, and the court will ultimately decide who is appointed.
Marital Contracts
Getting married can be a very exciting time in your life. In the excitement of marriage, not everyone wants to consider a prenuptial agreement. However, where there is a family business with assets built up over multiple generations, it may be something worth considering to protect your own, your family’s, and your business assets, in the event of a matrimonial split.
A prenuptial agreement (prenup) is a legal contract created prior to marriage outlining the property and financial rights of each spouse and how future assets may be split in the event of a divorce or death. A postnuptial agreement (postnup) can be created after marriage and is undertaken in a similar manner as a prenup.
When undertaking such agreements, both parties require to be separately represented and advised so it is imperative that advice from a suitably qualified solicitor is taken.
Whilst both ‘prenups’ and ‘postnups’ can be tricky conversations to have with your partner, the agreement can bring clarity and protection for both parties in the event of a split, and for other family members and/or partners involved in the family business it can bring clarity and peace of mind in how the marriage/divorce may impact upon the farming business.
Throughout all these agreements, full disclosure is required from all parties, and documents must be signed and witnessed.
Heritable vs Moveable Assets
The distinction between heritable and moveable assets is very important for legal and financial planning. Heritable assets are land, buildings, and property, whereas moveable assets are everything else in an individual’s estate such as cash, stocks and shares, personal belongings, vehicles etc.
This distinction matters because heritable and moveable assets can be treated differently in Wills, succession law, and for tax purposes. Being clear about what you own — and how it is categorised — will help ensure that your personal wishes are carried out and legal rights and tax obligations are properly managed.
Partnerships
Partnerships are very common in agricultural businesses. It is imperative that all partnerships have a written agreement in place. Not only does it set out the roles and responsibilities of the partners, but it can be tailored to the business’s needs.
Prior to joining a partnership, you should ask to see a copy of the business accounts to understand the general health of the business. Taking independent advice from an agricultural accountant can help you to make informed decisions about joining.
It’s important to remember that as a partner you are jointly and individually responsible for both the profits and the losses, so you need to understand how this may impact upon you personally and be confident that your voice will be heard by the other partners involved.
In some cases, a younger partner may be introduced with the largest share in the business to help facilitate eligibility for young farmers grants and funding opportunities. It is important that the individual concerned is aware of their responsibilities and that all other partners are consulted and agree with this change to the business.
Land Titles
It is important to check that all land ownership is up to date with the Registers of Scotland. Quite often transfers can be missed in the stress of a family member passing away.
There is a fee involved in checking Land Titles, and you can order them yourself by checking the ScotLIS website. Your solicitor can also help undertake a detailed search and assist you with this process.
Tenancies
A tenancy can be an asset and left in a Will to a family member. However, agricultural tenancies can be a very specialist area requiring advice from a specialist solicitor.
Depending on the type of tenancy (1991 Secure, Limited Duration, MLDT, SLDT) and the wording of the specific tenancy, there may be Notices and timelines to be followed for the legal transfer.
In all cases, an agricultural solicitor is essential as upon the death of a tenant, there is a very short window to undertake a range of legal activities.
In some cases, it may be beneficial to plan ahead whilst the tenant is still alive by transferring 1991 Secure Tenancies to the intended successor through Assignation. This is a process by which a new tenant is proposed by an outgoing tenant then a set procedure is followed with the help of solicitors and land agents to transfer the tenancy.
To protect the tenancy, a Minute of Agreement can be drafted so that if the new tenant relinquished the tenancy (gave the tenancy back to the landlord or sells it on) any family members would have a claim on any financial gain. More information can be found here.
A guide to the Transfer of Tenancies by Assignation and Succession is available here.
Further Advice & Support
It’s never too early to start a conversation about succession – after all, with the right financial and legal advice it may not be as difficult as you imagine.
A family succession meeting is not a 10 minute discussion at breakfast time! Families should consider arranging formal, diarised meetings, and it may be beneficial to have a neutral third-party facilitator, such as an agricultural consultant or specialist, to ensure fairness and inclusion in discussion.
This can allow for open and informed discussions about the future to take place with notes and actions taken to help provide an action plan for moving forward avoiding potential misinterpretation.
Further guidance on Inheritance Tax and Reliefs is available here.
You may be able to access Specialist Advice funding for Succession Planning. find out more.
Jennifer Galloway, SAC Consulting
Further Information
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