STAYING on the family farm to help mum and dad is no guarantee of your entitlement to take over the property ahead of other siblings who left home years ago, warns Brisbane lawyer Paul Paxton-Hall.
Any children from a farming family may have rights to an equal share in their parents' estate regardless of whether or not they have lived on the farm and contributed to the enterprise as their parents have aged.
Mr Paxton Hall said a recent complicated NSW Supreme Court case which eventually found in favour of siblings who had not been actively part of the management of their Riverina family farm highlighted the risks of assumed inheritance, changing relationship dynamics and inadequate estate planning.
He said with children often moving away from the property and taking up new careers, parents needed to be sure their wills and estate plans were set up effectively to avoid potential conflict.
"Estate planning issues are usually a case of `out of sight, out of mind', but parents and their offspring need to pay attention to issues affecting the whole family," said Mr Paxton-Hall, whose firm specialises in rural estate planning.
It was increasingly common for children raised on a property to move to town or city jobs, while maybe one sibling returned home after finishing school or university to work, sometimes earning low wages in exchange for free board, fuel and other benefits.
"The risk arises when there's a verbal representation that the farm will one day be theirs without going to the next level of documenting that discussion," he said.
"An expectation could be created with the sibling or siblings remaining at home that will hold up regardless of whether or not there is some sort of estate plan established by their parents.
"They will get their share, but as a default, their city-living siblings may also have entitlements to the property, too, regardless of whether they've worked a day on the property or not."
Unless a well-structured estate plan was discussed and drawn up specifically ruling out opportunities for other siblings to make unanticipated claims, conflict and costly family disputes often resulted.
At the same time Mr Paxton-Hall said off-farm siblings should also be aware of a "developing area in law" which tended to support the representation or an assumed right to a farming property by children who stayed at home, even if other family members had always felt they were entitled to a share of the property.
He said a few recent court cases in Queensland and NSW had recognised a son or daughter's right to the farm business as a consequence of "estoppel" or encouragement relating back to certain promises and plans made between parents and a specific child.
He said farm inheritance and the competing interests of children were age-old challenges for rural families, with litigation still occurring more than many realised, and potentially costing millions of dollars in court costs, payments to winning parties and lost farm productivity.
"There's a distinct lack of attention paid to this part of the family business," he said.
Families must be proactive about initiating succession planning discussions, possibly starting early conversations when all siblings were back together informally with their parents.
"It's really important all members be involved in the estate planning process," he said.
"It's also important to appreciate new in-laws are thrown into the equation when sons or daughters marry, creating more potential points of stress if effective planning has been overlooked.
"Ultimately, however, the parents need the freedom to decide how they want to break up the estate rather than be confined to expectations of their children, or children-in-law."
