We are frequently engaged to assist in disputes between parents and adult children concerning the family farm.
These matters are rarely just about the farm, money or property. They are deeply personal, often emotional and usually tied to long-standing family dynamics and expectations.
Common themes
The common themes in these disputes are:
- there have been discussions around the kitchen table and promises about children taking over the farming business and being given the property at an unspecified time
- one or more of the siblings have worked at the farm for a small wage on the promise that they would take over the farming business or be given the farm
- nothing is documented
- he child or children claim that the business and / or the farming land is held on trust for them because of the undocumented agreement
Why do these disputes often not settle quickly?
These cases often settle, however not without lengthy litigation, significant legal costs, stress and a complete breakdown in the relationship between the parties.
The lack of evidence and difference in memories as to what has been promised often plays a significant role in the difficulty of these matters.
How can you minimise the risk of years of litigation?
- Document the agreement
If there is an agreement about one child taking over the business in time or working for minimal wages, document what is agreed and the timeframe – people’s memories are fallible and written evidence in most cases is more compelling in Court.
- Settle early
If possible, attempt to settle early.
Litigation is expensive and if there is a dispute, all parties are usually better off settling early rather than using a proportion of the family’s wealth on legal fees.
Once you have been in years of litigation, the relationship between the parties is also rarely able to be salvaged.
Lessons
Disputes amongst family members, especially when it involves generational farming are difficult and often involve complex arguments about whether certain property is held on trust for an adult child. Evidence is key and advice should be sought early.
Disputes over family farms can be some of the most challenging matters to resolve. While they often centre on property and succession, at their heart they involve family relationships, expectations, and trust. The earlier advice is sought, the greater the chance of avoiding years of costly litigation and irreparable damage to relationships.
If you would like to discuss how to minimise the risk of family farm disputes, or if you are currently facing one, please contact Catherine Ballantyne, Principal on + 61 3 9242 4766 and catherine.ballantyne@madgwicks.com.au
The information provided in this article is general in nature and cannot be relied on as legal advice, nor does it create an engagement. Please contact one our lawyers listed above for advice about your specific situation.
