Farming and Divorce19-Dec-2017

 

When farming spouses separate and divorce, complex problems often arise. A simple uncontested divorce may take 6 months or less but farming divorce cases usually take longer.

Often farms are inherited, which may mean that the land and farm buildings are not marital assets and therefore not subject to the ‘sharing principle’. On divorce, both spouses and any children must be treated fairly and should expect to have their reasonable needs met wherever possible. However, it is very difficult to extract capital from farm assets without affecting income and by logical extension the ability to pay maintenance.

Farms are often ‘capital rich’ and ‘income poor’ and they tend to be ‘lifestyle’ businesses with the country lifestyle being supported by the farm business, but very difficult to replicate away from the farm.

Farms often involve complex ownership structures such as:

  • Partnerships
  • Limited companies
  • Trusts
  • Specialised agricultural tenancies
  • Contracting arrangements
  • Intergenerational and/or wider family ownership
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    These structures may make it very difficult to unpick and release capital to provide alternative accommodation. The wider family involvement may cause friction and emotional conflict between generations, which makes the emotional fall out for the couple and their children even trickier to navigate.

    The challenge for the family lawyer is to find a solution to allow both spouses and their children to be provided for, whilst retaining the farm assets and income generation as much as possible.

    Prevention is better than cure. The farm provides the family’s livelihood and lifestyle and there is a drive among farming families to preserve the farm for future generations. Divorce and separation will cause anxiety in the family and may affect preservation of the farm for the family. Any member of a farming family contemplating marriage is strongly recommended to consider making a pre-nuptial agreement regulating what should happen in the event of separation or divorce. This should be done in plenty of time beforehand and should be signed at least 28 days before the wedding day. The agreement must consider the needs of both parties and of any future children of the marriage.

    It is important to take early, expert legal advice to ensure that any risks to your farm and assets are minimised.

    Cullimore Dutton has an expert team of family lawyers, supported by experts in trusts and agricultural law. For more information and to arrange a free initial half hour consultation please contact our family team on 01244 356 789 or email diana.williams@cullimoredutton.co.uk.

     

    This is not legal advice; it is intended to provide information of general interest about current legal issues.