Farming divorces are often complex and laden with dynastic history and emotion. In non-farming cases, it is usually fairly straightforward to establish which spouse owns what.
Conversely, the first challenge for the farming divorce lawyer is to establish who owns the assets and resources previously available to the family may not be owned personally by the couple. A farm may have been held for generations and in diverse forms of ownership. For example, the assets and business may be held through a limited company with numerous shareholders (often other family members), or through a will trust or family partnership.
Maintaining a farm business in these challenging times is already difficult. The stress and emotional pressure of a separation are often an unwelcome addition to the challenge faced by farmers.
The unique challenges of farming divorces include dividing up assets such as land and livestock that carry both financial and emotional value. It is crucial to seek the advice of a solicitor experienced in farming divorce cases to navigate these challenges.
Here are our top tips for those in the farming community considering a divorce:
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Consider all of the options
The court is not the only option and should not be the starting point. Parties should consider non-court dispute resolution (NCDR), such as mediation, collaboration, private Financial Dispute Resolution hearing heard by a private Judge or arbitration, and a determination to keep things amicable will assist in achieving agreement speedily and economically.
Whilst the court process tends to take longer, cost more and be more public, it is sometimes unavoidable.
While there is no “typical” farming divorce, most settle within a year. An uncontested divorce can be settled in six months. while a complex, contested divorce can easily take 18 months to two years.
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Understand the range of outcomes at the outset
The starting point for the division of assets on divorce is always an equal division. However, equal division is not always considered to be ‘fair’, and an equal division may not be a realistic outcome for farmers. This may be because of a need to preserve assets that were owned before the marriage, but fairness still requires financial needs to be met.
The Family Court will endeavour to avoid the forced sale of assets, which might in turn threaten the viability of a farming business. For example, a judge may make an order that a spouse be paid out over a number of years to keep the farm alive.
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Ensure you have the complete picture
It is imperative that there is full and frank financial disclosure of the financial circumstances. Full financial disclosure should be obtained in every divorce case. A farming case is no different. However, the extent of the financial documents needed to complete disclosure is often more substantial, ranging from information as to how assets are held, to disclosure of the latest farming management accounts, a review of income generation and spending.
Parties can avoid costly, protracted arguments and the creation of mistrust if there is transparency from the outset.
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Protect the asset base
If there is a suspicion that divorce proceedings may be imminent, it may be sensible to limit overdraft facilities and put in spending limits on bank accounts and credit cards. Unilateral action, however, should be a last resort because a bank may seek to freeze a joint account if it gets wind of a divorce.
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Being tech-savvy
It is unlawful to view and take another person’s private documents and information by accessing their computer (which includes tablets, iPads, phones and so on). Where use has previously been joint and unlimited, think about limiting or preventing access to computers, laptops, phones, etc. Consider applying new passwords to email accounts. Also, avoid the temptation to vent emotions via social media – better still, take down all social media accounts.
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Find your team
Given the complexities that arise from a farming divorce, having proper advice from professionals at an early stage is imperative. Typically, advice will be needed from accountants, land valuers and agricultural advisers. Making an error could have significant tax ramifications arising from the division/selling of assets.
It is necessary for your team to be fully independent and have your best interests at heart.
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Update your will
In light of your separation, your intentions as to how your share of the asset pool may change – you may not wish for your estranged spouse to inherit on your death.
Consider making a holding will during divorce proceedings, especially if third parties are involved and assets are held as “joint tenants”, where the interest of one party passes to the other automatically on death. Again, consider the tax planning aspects. If you have named your spouse as a beneficiary or executor in your will, these provisions will cease to have effect on divorce.
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Ensure that the legal costs are proportionate
Farming divorces can be expensive, and the legal work undertaken should be necessary to progress the case.
Ensure that your solicitor provides you with estimates of legal fees from the outset and keeps you fully updated. Also, ask for a monthly breakdown of costs to ensure that costs are being managed properly and proportionately.
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Future-proofing the assets
If you are considering marrying again, you should take advice from a solicitor as to having a prenuptial or postnuptial agreement. Such nuptial agreements are increasingly popular nowadays and can protect assets and minimise legal costs in the event of the breakdown of a marriage.
Daniel Jones, Family Law Partner here at Prosperity Law is an experienced financial remedy solicitor who has dealt with numerous farming divorce cases. Daniel is himself also from a farming background and is therefore fully alive to the challenges that face farmers.
It is essential that the correct strategy is adopted from the outset, and that is what Daniel prides himself on getting absolutely right.
Daniel can be contacted by phone 0151 958 0057 / 07354421171 or by email Daniel.Jones@prosperitylaw.com
Glossary of Terms
Farming Divorce
A divorce involving individuals who own or operate a farm. These cases are often more complex due to the nature of farming assets, intergenerational ownership, and emotional ties to land and business.
Dynastic Ownership
Ownership passed down through generations within a family. In farming divorces, this can complicate identifying who truly owns what.
Limited Company / Family Partnership / Will Trust
Different legal structures are often used to hold farming assets. These can obscure individual ownership and require careful legal analysis during divorce.
Non-Court Dispute Resolution (NCDR)
Alternative ways to resolve divorce issues outside of court, such as:
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Mediation: A Neutral third party helps both spouses reach an agreement.
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Collaborative Law: Each party has their own solicitor, but all commit to resolving matters amicably.
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Private Financial Dispute Resolution (FDR): A private hearing with a judge-like figure.
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Arbitration: A Binding decision by an agreed-upon arbitrator.
Financial Disclosure
The legal requirement is for both spouses to fully disclose their financial situation. In farming cases, this may include management accounts, valuations, income, and asset ownership details.
Fairness Principle
The court aims for a fair outcome, not necessarily a 50/50 split. For farmers, preserving the business and land can be prioritised if needs are met.
Deferred Lump Sum
A financial settlement paid over time to avoid forcing the sale of critical farm assets.
Transparency
Key to maintaining trust and avoiding expensive disputes in divorce. Both sides must be open about finances and intentions.
Asset Protection
Steps taken to protect shared finances and property when divorce seems likely, such as adjusting spending or securing accounts, are done cautiously to avoid adverse consequences.
Tech and Privacy in Divorce
It is illegal to access your spouse’s private digital information. Change passwords on shared devices and be cautious with online communications.
Professional Team
A network of professionals, like solicitors, accountants, agricultural valuers, and tax advisers brought in to handle complex farming divorces properly.
Holding Will
A temporary will made during divorce proceedings to reflect new intentions around inheritance, particularly relevant in farming cases where joint asset ownership is common.
Proportional Legal Costs
Legal expenses in a farming divorce should be managed carefully. Solicitors should provide cost estimates and updates regularly.
Nuptial Agreement
A prenup or postnup agreement setting out how assets will be divided in the event of divorce. Particularly important in farming families to protect inherited land and businesses.
