Member Article

How to leave a racehorse in your will

The racing of thoroughbred horses, is now this country’s second most popular spectator sport, and, according to the Racehorse Owners’ Association, 35,000 people in the UK are now involved in racehorse ownership in some way.

Those fortunate enough to own a racehorse, or more commonly a share in one, may not have given any thought as to whether a clause relating to the racehorse should be included in a Will.

As with all personal effects of value, whether emotional or financial, care should be taken to ensure ownership of your horse passes as you would wish. The first crucial step in this process is to ascertain the form your racehorse ownership takes: do you own the horse solely, jointly or as part of a racing partnership or company?

Sole ownership

If you own a racehorse in your sole name then in legal terminology it is a “personal chattel”. A personal chattel is tangible moveable property and items such as jewellery, paintings and furniture also fall within this definition. You may have a clause in your Will giving all your personal chattels to a specified person. The question of whether a racehorse falls within this definition was considered in a High Court case in 1955 when Mr Hutchinson died without leaving a Will. The court was required to decide whether his string of twelve racehorses should pass to his widow under the intestacy rules, which provided for personal chattels to pass to a surviving spouse.

It was decided that as Mr Hutchinson owned the horses for purely recreational purposes (distinct from his stud farm business which bred some of the horses), and as they were not business assets, they fell within the definition of personal chattels and passed to his widow. The legal definition of personal chattels has been amended since 1955, but it still remains the case that a gift of personal chattels in your Will includes your racehorse unless you own it solely or mainly for business purposes or as an investment. The safest course of action is probably to include a specific legacy in your Will referring to your horse and to whom you wish to leave it, just in case, for example, by the time of your death the nature of your ownership has changed from recreational to mainly business purposes.

Joint ownership

If you own your racehorse jointly with one or more other persons then how your share passes after your death depends on whether you own it jointly as joint tenants (when the surviving co-owner(s) will become the owners) or as tenants in common (when you will be able to leave your share under your Will to your chosen beneficiary). You should agree with your co-owner which type of ownership will apply and record that agreement in writing so there can be no disputes if something were to happen to one of you.

Ownership through a racing partnership or syndicate

This is becoming an increasingly popular way of making racehorse ownership more accessible. A partnership will have two registered owners and the horse will run in either or both names. As with any legal arrangement of this nature, a written agreement should always be put in place and this agreement may provide what happens on the death of one of the members. The agreement could state that the owners are beneficial tenants in common as explained above, or it might provide that the surviving owners have the option of buying the deceased owner’s share from his or her estate. The advice is to check the agreement, then decide what further action (if any) you should take.

Ownership through a company

If you own a share of a racehorse through a company structure then you will own a share or shares in the company which is a separate legal entity to its individual owners. In this case you could leave your share(s) under your Will to a specified beneficiary. As with ownership through a partnership it is essential to check the documents governing how the company is run, its articles of association and any shareholders’ agreement, because these may contain provisions which affect how you deal with the shares in your Will.

This was posted in Bdaily's Members' News section by Clarke Willmott .