Transferring the Family Farm

Transferring the family farm is a very big step and there are many matters to be considered when a decision is made by a farmer to transfer the farm to his/her child/other family member.  The best way of going about things is for the farmer to speak with his/her solicitor well in advance of the proposed transfer to tease out the various issues that are involved so that a workable and satisfactory solution is achieved for all concerned. Once the transferring farmer is financially secure and happy with the new arrangements, the transfer of the farm can lead to a great relief that the future of the farm has been secured.
When a farmer meets with his/her solicitor, they will discuss in detail the proposed transfer including the practicality of it, the tax implications arising on the transfer, the social welfare considerations and the legal considerations that arise.
Some of the legal items that need to be considered include;
Future security – The farmer should ensure that they retain security for themselves for the future. This can be achieved by retaining a right to support and maintenance and/or providing for a right to nursing home care. The right to support and maintenance normally provides a right to be supported and maintained on and out of the lands in the same manner as the farmer has been accustomed to, together with provision of all necessary medical and domestic needs i.e. food, clothing, heating and lighting in the dwelling house etc. If the transfer provides for a right to nursing home care this  may affect the farmers eligibility for the nursing home  fair deal scheme, should the need arise, and it can also create a serious financial burden for the person receiving the farm, especially when one considers the cost of nursing home care.
Living arrangements — The location of the farmhouse will determine whether it is reasonable to have it owned separately from the farm. If the farmhouse is contained within the same folio as the lands, an engineer will need to mark the house out separately on a map, if the house is to be retained by the farmer. There is also a need to ensure independent access and services to the dwellinghouse.  If a farmer decides to retain the dwellinghouse he/she then needs to make provision in his/her Will as to what will happen to the house after they pass away. This issue could potentially give rise to a dispute where the house is left in a Will to a non-farming family member who may be living elsewhere and who may wish to sell the farmhouse in the future.
Other family members — Provision can be made, at the time of the transfer, for other family members e.g. the person receiving the farm being required to pay a cash amount to persons nominated by the farmer.  It is necessary for the farmer to consider if this is a reasonable request or if it will be too onerous on the person receiving the farm.  Will it require him/her to get a loan which will have to be secured on the farm they are receiving and will they have the ability to pay same?
Will — If the farm is transferred, the farmers Will may need to be updated after the transfer has taken place to deal with the farmers other assets and to look at how the existing Will, if any, may have been affected by the farm transfer. For example, if the Will provided that a site was to be transferred to another child/family member and the site is transferred as part of the farm, the site will not be there for the other child/family member when it comes to administering the Will.
It is important to weigh up all of the above matters in addition to the other legal, tax and social welfare   considerations, before making the final decision about how to transfer the farm.