Agribusiness News March 2025 – Management Matters: Wills & Power of Attorney

Autumn Budget 2024 – fundamental change to Inheritance Tax

The Budget brought significant changes to Inheritance Tax, particularly concerning Agricultural Property Relief (APR) and Business Property Relief (BPR). These changes could result in some farming assets now being subject to IHT. Given these developments, estate planning has never been more crucial.

Many farmers still lack a will or a Power of Attorney, putting their farms at financial and operational risk.

Why every farmer needs a will

1. Avoids intestacy laws – If you die without a will, your estate will be handled according to Scotland’s intestacy laws, which may not reflect your wishes.
2. Reduces inheritance tax exposure – Helps structure assets in most tax efficient manner.
3. Prevents family disputes – Clearly sets out your wishes reduces the likelihood of conflicts.
4. Appoints guardians for young children – Enables you to appoint guardians to take care of children in the event of your untimely passing.

Seek advice to structure your estate efficiently. Regularly update your will to reflect changes. Clearly outline succession plans for the farm to avoid confusion and legal disputes.

Why every farmer needs power of attorney

A Power of Attorney (POA) allows you to appoint someone to make decisions on your behalf should you become incapacitated.

1. Ensures business continuity – Allows a trusted person to make financial and operational decisions.
2. Protects personal and business finances – Without a POA, no one can access your bank accounts, or manage financial affairs on your behalf.
3. Avoids costly and lengthy legal proceedings – If you become incapacitated without a POA, your family may have to apply to the courts for guardianship, a lengthy and expensive process.
4. Gives you control over who makes your decisions – Allows you to choose someone to manage your affairs rather than leaving it to the courts to decide.

Types of Power of Attorney in Scotland

• Continuing Power of Attorney (CPA) – Covers financial and property matters and can be used while you are still mentally capable or in the event of incapacity.
• Welfare Power of Attorney (WPA) – Allows your chosen attorney to make health and welfare decisions if you lose capacity.
• Combined POA – Covers both financial and welfare matters to ensure full protection.

Seek advice to draft a POA that suits your personal and business needs.  Register the POA with the Office of the Public Guardian in Scotland to make it legally effective.

The changes to APR and BPR highlight the importance of proper estate planning for farmers. The failure to have a will or a POA in place can lead to unnecessary stress, legal battles, and financial hardship for loved ones.

For further guidance on wills, Powers of Attorney, and estate planning for farmers, contact a trusted agricultural solicitor. Your family and your farm depend on it.

Andrew Coalter, andrew.coalter@sac.co.uk, 07721 473 566