Protecting Your Family Farm

Where there's a Will, there's a way

Freddy was enjoying his Sunday morning coffee when Pebbles dropped by. 

“You looked worried Dad,” said Pebbles, “what’s the trouble?”

“I was talking with my neighbour Barney yesterday and he told me that his brother, who was a very successful farmer, died unexpectedly and now his children have gone to Court to dispute his Will.  It looks like no one in his family will be able to continue farming and both his farms will have to be sold,” said Freddy. 

“Well Dad,” said Pebbles, “it is one thing to be a successful farmer but that doesn’t always mean that the patriarch in a farming family has organised his family’s affairs well.  There are significant legal risks for farming families and failure to plan and manage those risks can have disastrous consequences.

“Farmers risk their property not being dealt with as they intend due to the operation of the law under the Family Protection Act and the Law Reform (Testamentary Promises) Act.

“The Family Protection Act enables a spouse, children and, in some cases, grandchildren to apply to the Court claiming a portion of the assets of the deceased person if the deceased’s Will did not provide them with ‘proper maintenance and support’.  There have been many cases involving farms where disaffected non-farming children have challenged their parent’s Will.  The outcome is often that the succeeding child is forced to sell the family farm. 

“A Will can also be challenged under the Law Reform (Testamentary Promises) Act.  The claimant is often a child or a close personal friend of the deceased who has cared for or helped the deceased in some way and been “promised” that they will be rewarded for that help in the Will. 

“A Will is not a full-proof way to transition a farming business to the next generation.  There is always a risk of a Court deciding that a property should be dealt with in a different manner than provided under the Will. 

“There have been many Court cases involving disputed Wills that have resulted in forced sales of farms - some of which have been in families for generations,” said Pebbles. 

“Gee,” said Freddy, “that is a lot of risk totally unrelated to good farming practices.”

“Yes,” said Pebbles, “it is important for farmers to have a plan and appropriate legal protections in place to manage risk so that they can transition their farms to the next generation in a way that is fair to non-farming children while still ensuring that they have the income they need to retire.

“Dad, do you remember the seminar that you and Mum went to down in Hawera in June about Future-Proofing, Transitioning and Good Governance for Farming Businesses?”

“I sure do,” said Freddy, “that was really useful and I have started thinking about a plan.” 

“We need to talk about your plan and we need to include your accountant, banker and the rest of the family too,” said Pebbles. 

“There is another seminar about Future-Proofing at the TET Centre in Inglewood on 24 October 2013.  I think you should invite Barney to attend.”

“That’s a great idea!” said Freddy.  “I know Barney would benefit and it will be a good refresher for me.  Thanks Pebbles.” 


The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.

If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser. 


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Marie Callander