Divorce is always tricky. Throw in a farm or an agricultural business, and the problems can multiply. Here’s our list of things to consider. And remember: everything is possible.
Most couples own a house, and a car or two. Farmers may own significant assets: land, a farmhouse, additional buildings, livestock, crops, equipment, and numerous vehicles of varying types. Assessing the value of these assets can be complicated and dividing them more so. Their value may fluctuate and the total value of assets could be high.
Farms often involve close-knit family relationships, with multiple generations working together. A divorce can impact these relationships and create conflicts about who will continue to run the farm and who gets a share of its income. Family members will be concerned if conversations turn to selling of the farm, and all the time the farm needs to be operated and managed effectively.
Farms are businesses and offer a livelihood for one or both spouses. Dividing the assets fairly is one consideration. Dividing the assets to ensure the continued success of the farm is another. Such conversations can be emotionally charged and legally intricate.
Inheritance and succession
Farms are often passed down through generations. In a divorce, the question of whether the farm is part of the family’s inheritance or marital property can be contentious. A divorce settlement might affect who inherits in the future.
The transfer of farm assets as part of a divorce may have tax consequences. There might be capital gains tax, inheritance tax, or agricultural property relief to consider, depending on the specific circumstances.
Farms require ongoing maintenance and upkeep. Determining the costs and responsibilities for maintaining the farm after the divorce, needs agreement.
Debts, liabilities, tenancies, loans
Farms often come with debts and liabilities, such as mortgages or agricultural loans. Agricultural tenancies need to be also considered.
One spouse may want to continue farming, while the other may seek a cash settlement. These differing goals can make negotiations challenging.
In a ‘normal’ divorce, all you might need is an estate agent valuation for the house and a solicitor to help you agree the split of pensions, investments, and children. In farming divorces, you may need more professional advice e.g. a farm appraiser and your solicitor should have in-depth farming and agricultural experience. Such a solicitor will have worked through the above issues frequently and have experience in dealing with farming and agricultural clients to create a settlement that is as amicable and fair as possible.
For further information, contact Rachel Davies on 01756 692877 or email email@example.com
23 October 2023
Further reading from AWB Charlesworth