Farming Divorces – How Do They Differ?

Farming Divorces 

In any divorce, the divorce procedure and the range of financial remedies available to a spouse are the same. Divorcing spouses have financial claims in relation to capital, property, income and pensions.

However, agricultural divorces are often more complex than a 'typical' divorce and require sensitive handling. This is because, unlike other businesses, farms are typically income light and capital heavy. Also, farms are often inherited and have been in the family for many years, with wider families having part ownership. Farm ownership can also be complicated by trusts, tenancies, third party interests and/or corporate ownership.

Division of assets on divorce

Any shareholding or interest the husband or wife may hold in the farm forms one of the assets to be considered for division on divorce. From the outset of divorce proceedings, both parties have a duty of full and frank financial disclosure of all financial assets, income and liabilities. This will include valuations of the farming land, the business itself, the business accounts, bank accounts and evidence regarding the income stream.

Therefore, both parties need to ensure that specialist experts are involved for land valuations, taxation advice, and business strategies going forward to ensure that the farming business can stay intact, if at all possible. 

Negotiating a financial settlement 

The needs of both parties are the most important factor in any case and will always be considered when negotiating a financial settlement. More often than not, the capital of the farm is tied up within the land and buildings, which in turn, generates income. Therefore, it can be harder to 'buy out' the other spouse. Accurate and creative financial advice is needed at an early stage to ensure that money can be released without jeopardising the farm. For example, just part of the farm could be sold or transferred or, there could be provision for capital payments over time.

A farm that has been in the family for generations in the expectation that it will be handed down can present complex legal arguments when a member of the family gets divorced. Prior succession planning may be jeopardised if one spouse is departing the farm, which can irreparably damage relationships between the couple and the wider family.

Alternative dispute resolution

The court's primary objective is to achieve fairness, and therefore, how the farm is dealt with on divorce will depend on the particular circumstances of the case and what is required to achieve that.  

At the outset, it is important for the parties to consider alternative dispute resolution (ADR) methods, such as mediation, round table meetings and/or arbitration. Court proceedings are the last resort, as the process can be very expensive and can take several years to resolve. ADR may be a viable option if the couple can communicate effectively, with the benefit of legal advice.

Here to help

Agricultural divorces are in a field of their own. Our specialist Family Solicitors can use their experience to help you reach an amicable settlement with your spouse. If you have any more questions or would like more information regarding agricultural divorce, you can contact us below.