Inheriting a Wind or Solar Farm: Tips for Landowners

Are you planning on inheriting a wind or solar farm in your lifetime? What can you do to make the probate process more streamlined? Whether you’re a beneficiary or a landowner trying to sort out your affairs, this guide will help you navigate the complexities.

Inheriting a wind or solar farm will often feel overwhelming, especially if you haven’t been involved with the project from the beginning.

Taking on a wind or solar farm in the UK comes with logistical challenges, and understanding the probate process will be crucial to get things underway.

In this blog, expert wills, trusts and estates solicitor Sam Dale will provide you with valuable tips. These include everything from what to include in your will to setting up succession planning guidelines for a smoother probate process. With his help, inheriting a wind or solar farm will feel far more manageable.

Samuel Dale

Solicitor and Partner at Butcher & Barlow LLP since 2010
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What’s the First Thing That Happens After Death?

I won’t go into the probate process in too much detail in this article (as I’ve written a comprehensive guide to the process). But let’s quickly cover what happens directly after death if you’re inheriting a wind or solar farm.

Any executors must register the death within five days to receive a death certificate. This certificate allows them to apply for a Grant of Probate, setting the probate process into motion.

What Happens During the Probate Process?

Once the executors have registered the death, the probate process follows four main steps:

1. Valuing the estate and assessing the will
2. Completing an Inheritance Tax Return (if required)
3. Applying for a Grant of Probate or Grant of Letters of Administration and paying any relevant fees
4. Settling any debts and distributing the estate.

During the first part of the process, the executor will need to register the death and receive a death certificate. The executors will then obtain the date-of-death values of assets and liabilities of the estate before completing the relevant Inheritance Tax (IHT) return if required.

After doing this, they can apply for a Grant of Probate (or Grant of Letters of Administration). Once the Grant of Probate is received, the executors can distribute the estate after settling any relevant debts.

While the process may seem simple, it can often be lengthy and involve a lot of back-and-forth discussions. The executors and solicitors (if appointed) should have the lion’s share of the responsibility here, but disagreements can often occur amongst beneficiaries. These disagreements can cause significant delays.

Tips for Inheriting a Wind or Solar Farm

1. Think about wills

The main tip I’d give anyone inheriting a wind or solar farm is to ensure an adequate will is in place.

While a will governs the affairs of the deceased, it’s important for families to have open discussions about these documents while the person is still alive. Not only does this make the succession process easier to understand, but it also sets clear expectations for both beneficiaries and executors.

What’s the worst that could happen without a will in place?

One of the more common obstacles that probate solicitors face is blended families.

For example, consider that a husband and wife die together in an accident, without a will in place. If their family is blended, the probate solicitor will need to determine who died first. Should this be indeterminable, it’ll be assumed that the older spouse died first.

In this scenario, all the assets from the spouse who died first will be inherited by the one who died second (for all of a few seconds, most likely). Essentially, the assets of both parties will pass to the spouse who died second – whether or not this is what the deceased intended.

Without a will, this is the process that solicitors and courts must follow. Since this could potentially disinherit one side of the family instantly, it can cause significant disputes among beneficiaries.

Another issue arises with couples who live together but never marry. If they don’t have a will, any assets will automatically pass to other members of the deceased’s family, rather than the surviving partner.

A real-world example

2. Allocate executors properly

Now that I’ve discussed wills in detail, let’s turn our attention to allocating your executors.

An executor is a personal representative who is legally responsible for money, property and possessions after a person’s death. They’re responsible for these assets until everything is passed over to the relevant beneficiaries as outlined in the will.

In short, the executor is the one who sorts out the estate once the person has died.

For this reason, you may want to appoint more detached family members, friends or even a solicitor to carry out your wishes. Beneficiaries may find it harder to move things forward if they have a personal stake in the decisions. In extreme cases, this can lead to disputes that ultimately bring the case to court.

When choosing your executors and making a will, getting legal advice is always a good idea. Solicitors can guide you on allocating your assets and selecting executors that you trust.

3. Create a solid list for your executors

One of the best things a landowner can do to make inheriting a wind or solar farm easier for beneficiaries is to list their assets.

While we don’t always think about keeping track of our investments and accounts, failing to do so can complicate things for executors.

You don’t necessarily need to create an extensive paper trail. However, a single document listing the locations of your assets can be handy if you happen to die unexpectedly.

4. Have a clear succession plan to minimise disputes

Speaking of creating a solid list for executors, you’ll want to have a clear succession plan to speed things up. Before you make a will, you’ll want to consider how you wish to distribute any land you have with a renewable energy project sitting on it.

In complex cases, it’s worth seeking the advice of an accountant and solicitor to ensure that inheriting your wind or solar farm will be straightforward for your beneficiaries.

In most cases, you’ll need to transfer lease agreements, outline how roles are distributed among beneficiaries and ensure the transition is as seamless as possible. After all, the purpose of good succession planning is to seamlessly transfer business operations to avoid any disruption.

So, take the time now to ensure everything is set up correctly. Trust us, your executors and beneficiaries will thank you for it.

It’s important to remember that proper succession planning can also prevent land from being sold upon your death. If one child is highly involved in the renewable energy project and another isn’t, this could lead to the forced sale or transfer of the project.

If the land or project is important to you, save your beneficiaries time, effort and stress by outlining your wishes clearly in a will.

If you want to split your land and any associated renewable energy projects equally between your beneficiaries, be aware that this can cause complications. In this situation, the beneficiaries would share the income from the project, but they may have two very separate lives to run.

For example, if a husband and wife inherit a wind or solar farm, they’d likely live together and agree on how it was run. However, if a brother and sister inherited it, two separate families would have to coexist and agree on the status quo.

While this wouldn’t be impossible, it requires careful succession planning to ensure it works smoothly.

5. Consider tax burdens carefully

The primary tax considerations anyone inheriting a wind or solar farm will need to think about are:

• Inheritance Tax
• Business Property Relief
• Agricultural Property Relief

So, let’s look at them more closely in relation to inheriting a wind or solar farm.

If you want to learn more about renewable energy project taxes (and how you can become more tax-efficient), check out our dedicated guide on the topic here.

Agricultural Property Relief

Agricultural Property Relief (APR) is another form of inheritance tax relief that applies only to the agricultural value of the land.

It’s available in either 100 per cent or 50 per cent relief and wouldn’t apply to the land once you place turbines or panels on it. While you would still receive agricultural property relief for the land the turbines stand on, the value of the renewable energy project itself would not be included in the relief, meaning the relief would be based solely on the agricultural value of the land.

There are discussions about removing or capping future inheritance tax relief for farmers, which could have a significant impact on smaller family farms and even affect food security.

To better understand the potential consequences, let’s look at a survey carried out by the Country Land and Business Association (CLA). In this survey, more than 86 per cent of the 500 farmers and landowners surveyed said they would be forced to sell land following their death if the relief were scrapped.

Additionally, 90 per cent of respondents believed that the UK’s food security would be severely damaged as a result.

So, it’s certainly food for thought and something you’ll need to consider carefully when drawing up your will.

6. Be aware of timings

While the saying ’patience is a virtue’ is apt in many legal situations, it’s especially true when it comes to the probate process.

The time between the date of death and an executor distributing assets can be anywhere from three months to a year. In some complex cases, it can be even longer.

Therefore, it’s important to temper your expectations and be prepared for delays to avoid frustration if you’re inheriting a wind or solar farm.

There You Have It: Those Were My Top Tips for Inheriting a Renewable Energy Project

Still trying to understand the probate process? Need help maximising the value of your land before you pass it on? If so, get in touch with the team at Lumify Energy.

We’ll be happy to help you secure the best deal for your land and ensure future generations continue to benefit from renewable energy projects stationed on your property.

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