Divorce in farming communities: how to protect assets for future generations

Remote rural English countryside in Cumbria, with rolling hills and isolated farmhouses.

Divorces among farming communities are historically more complex and treated differently by the courts.  

Whereas divorces outside the farming sector are more straightforward to establish which assets the respective spouses own, farming-related cases entail working out how ex husbands and wives and their children can be provided for – avoiding, if possible, the sale of assets.

Some farms are run as limited companies and others as a partnership – the latter frequently without a formal agreement which can cause confusion over how assets are treated on separation. Establishing the value of assets is extremely important with valuations required, for example, of machinery, crops in the ground and milk quotas.

In most cases the farm, which is also the matrimonial home, is a generational asset that has been in the family for many decades. In divorce it is usually a better course of action to preservethe ongoing business enterprise as this is the income producing asset. 

Solutions to meet a spouse’s housing and income needs may however necessitate selling plots of land, particularly if it will not affect the viability of the business. The court will also examine whether borrowing is feasible against farm assets to raise capital, again to minimise the impact on the business.

Setting in place pre-nuptial agreements – which are becoming more common in large scale farming enterprises – can go a long way to secure the future of the farm and protect and preserve its assets for future generations.

Although still not legally binding in England and Wales, in the majority of cases pre-nups are widely accepted as the sensible way for couples to avoid the potential distress, acrimony and expense associated with resolving financial matters, should their relationship end.

The agreements must be entered into freely and willingly by both parties, ensuring the outcome would not result in an unfair settlement for either of them. It is vital that both spouses enlist independent legal advice before signing them.   

Situations where such contracts run into problems include when judges think they have been signed in haste and under pressure. They will want to know that the partner with the most to lose understood the agreement, was not under duress when they signed it, and took independent legal advice. Courts may ignore or vary pre-nups drawn up in haste.

We always advise that the agreement is signed at least 21 days before the wedding, making full financial disclosure and securing good legal advice.

If respected family lawyers help draw up the agreement, judges can be confident that both parties understood it fully and were not rushed into it.

Jones Myers has extensive expertise in cases involving farming and agricultural assets in marriage and relationship breakdown. Call our Leeds office on 0113 246 0055, our Harrogate office on 01423 276104, visit www.jonesmyers.co.uk, email info@jonesmyers.co.uk or tweet us @helpwithdivorce

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