The importance of having a formal written agreement in place in relation to the future of a farming business has once again been emphasised by a high-profile dispute which has hit the headlines, according to legal experts from Irwin Mitchell.

88-year-old Marian Horsford, who retired from her family’s farming partnership in December 2016 has now launched a legal claim against her son Peter, 54, for around £2.5 million – the amount which she alleges is equal to her share of the family estate.

Peter is defending the claim on the basis that he has worked on the 540-acre family farm in Cambridgeshire since childhood, often undertaking long hours in the process. Furthermore he believes he has essentially been running the business alone for around 18 years, while he has also claimed that his parents told him: “This will be yours one day.”

However, Mrs Horsford has claimed no such promises were ever made and also has evidence that she considered leaving her share of the estate to one of her daughters. Furthermore, she believes Peter has not lost out financially as a result of working on the farm.

While she accepts there was a previous understanding that Peter would likely inherit the parental share, she added that this would only happen when she and her husband, who has dementia, have died.

Examining the details of the case, legal experts at Irwin Mitchell have said it is yet another example of why proper formal agreements can be hugely beneficial in such matters.

Heather Roberts, an associate in the Will, Trust and Estate Disputes team at Irwin Mitchell, said: “Previous decisions in cases similar to this show that where someone has relied on a promise and invested time into a business for little financial gain, the courts are often not prepared to allow that promise to be broken.

“However, this case brings a fresh angle on the matter, with Mrs Horsford denying the existence of a promise and also arguing that her son has benefited from considerable financial gain.

“Ultimately though, this issue simply boils down to the fact that the farming community historically does not have a great record in terms of putting formal arrangements in place in relation to such matters.

“A proper business partnership agreement is absolutely vital when family members are involved in a farm, as it would clearly stipulate how such a business should be divided as and when circumstances change. Such clarity should leave all parties in no doubt where they stand and would also mean the likelihood of disputes is at least minimised.”

Heather added that those involved in farming businesses should also not ignore the importance of addressing other issues too.

She explained: “Having a valid and up-to-date will is also essential if you want to ensure your estate is split in the manner that you desire, but it is unfortunately not uncommon to see disputes arise due to the lack of such a document.

“Furthermore, another avenue worth exploring could be a trust structure which may help minimise inheritance tax. This could particularly vital considering how the value of rural land has increased through the years.

“Considering such matters and thinking about the future in general is not always easy, but finding the time to do it could ultimately save you and your loved ones a significant amount of stress and turmoil in the years ahead.”