Leaving your Croft by Will. According to a survey by Standard Life, some 61% of people have not yet made a Will. Many of those questioned in such surveys appreciate the importance of making a Will, but tend to leave this ‘on the back burner’.
Where there is no Will it is regulations laid down by Parliament, and not the wishes of the individual or their family, which decide who receives your assets and deals with your estate. These rules are complex, may be changed from time to time without your knowledge and frequently produce surprising and unexpected results for those left behind. The simple fact is that this can spell disaster, particularly where a Croft is involved as this adds another layer of complexity.
A common dilemma is where a single Croft tenancy is owned, with little in the way of other assets, and the Crofter has more than one child. The difficulty here is that although the law now permits a Croft tenancy to be split between several beneficiaries (eg a Crofter’s children) the consent of the Crofting Commission is required to divide it between multiple owners, leaving each with a new separate Croft. The outcome of a division application is uncertain, given that consent may well be refused, particularly where the Croft is too small for it to be feasible to be split in this way. If the application is refused the bequest of the Croft fails and passes under the intestacy rules.
Instead of waiting until after your death for a division application to be made it is often much better to apply during your lifetime, as if consent is not given it is then possible to consider alternative options. Those options include the following:
1) Direct the Executors of your Will to sell the Croft Tenancy to a third party, so that the net sale proceeds are distributed by your Executors equally between all of your children.
2) Direct the Executors of your Will to offer the Croft Tenancy for sale to one of your children. Again, the net sale proceeds can then be distributed by your Executors equally between all of your children.
3) In your lifetime, purchase the Croft house and garden ground from the landlord, and leave these by Will to all of your children equally, but bequeathing the Tenancy of the Croft land to just one of them. As the bulk of the value tends to be in the Croft house, rather than the Croft land, this will help to ensure that all of your children are dealt with fairly.
4) As a variation on the above, purchase the Croft house with garden ground and Croft land in your lifetime from the landlord, and leave these by Will to all of your children equally. This may also involve de-crofting the Croft house and garden ground, but not necessarily.
It is also important to consider other issues, such as the requirement for a Croft to be worked and for a tenant to live within 20 miles (32 kilometres) of it, as well as leaving any share in common grazings specifically by Will.
So with some forward planning it is possible to extend your options for passing on your Croft. At Macleod & MacCallum we have a specialised Rural Land Department which is able to advise on those options, whilst our Private Client Department can ensure that your wishes are properly recorded in your Will and carried out at the appropriate time.
If you have any queries regarding the issues referred to in this article please contact Chris Wallace in our Private Client Department.