She has compiled the following list of frequently asked questions which come from clients from farming backgrounds. This week’s questions are on farm property transfers.
>> No. Your son would be the owner of half of the property. So, in a divorce situation, this would be an asset of his which would be taken into account in determining what his wife would be entitled to. Furthermore, there would be an expectation that your son would inherit your share from you, whether as a surviving joint tenant or tenant in common. It is likely that an additional allowance would be made in favour of the wife to account for that future expected inheritance. A judge has a duty to ensure that proper and fair provision is made for a spouse.
>> Well, the transfer into the joint names of you and your son as joint tenants will mean that the farm will automatically become your son’s sole property on your death. You will remain a joint owner of the property, and therefore, if you go into a nursing home, half the value of the asset will be liable to assessment for payment of the fees. Owning your property as joint tenants means that the property belongs to you and the other owner jointly.
>> If the farm is transferred, the transfer will override the provisions in your will in relation to the farm, and in relation to any money or other obligation, you intended to come out of the farm. A will speaks as and from the date of death only. Assets remaining as and at the date of death fall to be administered only. Assets transferred prior to the date of death do not form part of one’s estate.
It is important you review and update your will after the farm is transferred. It is important to make a will to deal with your remaining assets.
>> You have two choices here. You can transfer it but keep exclusive use of the dwelling-house for the lives of you and your spouse. Your child will become the owner of the house, but you and your spouse will remain in control of the house. Alternatively, you can open a separate title and keep the house in your name for the rest of your life, and leave it pass in your will. It is important to be practical here, and consider all factors. You are giving a very valuable gift away to a loved one, but you also need to ensure that you will be protected and secure when you are facing into old age.
>> Your child can be responsible for your support and maintenance, as set out in the Deed of Transfer. This support and maintenance goes as a first legal charge against the property, and it affects the property regardless of who owns it. You do not ever have to exercise these rights, but they are available to you, should you require them. The Deed of Transfer can set out that this support and maintenance includes the provision of all food, clothing, heating and lighting in the dwelling-house. It can also include that your nursing home expenses shall be paid by your child, in the event that it is required. Again, you do not have to exercise these rights, but there are available to you.
>> If you wish to give a building site to one of your other children, this must be done prior to the transfer of the farm, as a map will be required to mark out the various sites to be transferred prior to the transfer of the farm.
>> No. As the law stands, the single farm payments are attached to the farmer, not to the land. If it is your wish to have the single farm payments go to a family member who is to inherit the farm, you should state this express-ly in your will. Otherwise, the single farm payment could end up in the residue of your will, and could pass to someone who has no involvement with the farm whatsoever.
>> A qualified cohabitant may apply to court for a range of orders, including maintenance, property or pension adjustment orders and provision from the estate of a deceased cohabitant.
If the court is satisfied that the applicant is financially dependent on the other co-habitant, it can order the other party in the relationship to provide maintenance, property, pension entitlements or a provision from the estate, in the case of a deceased cohabitant.
¦ The financial circumstances, needs and obligations of each cohabitant.
¦ The rights of others. An order may not affect the rights of a spouse or former spouse.
¦ The duration and nature of the relationship.
¦ The contribution made by each.
The court can vary, suspend or discharge an order, if circumstances change.
A way of side-stepping the possibility of this scenario ever arising is by drawing up a Cohabitants’ Agreement. If an agreement is entered into, it is essential that all parties are independently advised.