Any divorce is sad and traumatic – but when the couple’s assets include a share in the family farm, a whole new layer of complications can arise.
Farms have often been in the same family for generations, so it is understandable for the wider family to worry that it will have to be sold to settle a divorce claim.
Sarah Millington, a partner in the Family Law, Divorce and Children team at FBC Manby Bowdler, said it was often the older generations who had concerns that their adult child’s spouse might make a claim on the family farm.
She said: “Divorce courts include the value of all of the parties assets – whatever form they take. If one of the parties in the divorce has a share in the family farm, it is understandable that the other owners and family will be concerned that it might have to be sold or broken up.
“Good legal advice before the marriage is really key here, even though discussing what would happen on a separation, before the marriage has started might seem a bit pessimistic.
“Pre and post-nuptial agreements aren’t legally binding in England and Wales but the law on this discrete area is evolving by the day. So long as they have been drawn up properly and are fair, the courts will usually require the parties to honour the terms that had been agreed.
“These agreements enormously help the prospects of securing the farm for future generations of the family. Good legal advice at the start can save a huge amount of time, stress and money further down the line.”
Sarah said often farms are capital rich and income poor, but that courts would generally try to avoid the forced sale of a profitable farm or business, but this has to be balanced against the needs of both parties in the divorce being met and is on occasions the only way for those needs to be met. Courts can also order the transfer of shares in the farm, a prospect which can cause a huge amount of upset.
Good strategic financial planning right at the start of the marriage can avoid the necessity to sell the farm or shares, and could even change the starting assumption that assets should be divided 50/50.
Sarah added: “No-one likes to plan for the end of a marriage, but when your assets involve something as high value and emotionally important as the family farm, it really is vital to get the right advice.”
For more information and advice about divorce in farming families, contact Sarah Millington via email firstname.lastname@example.org or call 01743 284156.