What happens to the farm on divorce?

Year Published: 2021

Divorce is never an easy process to navigate but when a farm is involved, finances can be difficult to resolve. Divorce amongst the farming community is often high; this could be down to stress and strain arising from poor work/life balance and cash flow difficulties. On divorce, the farm will be classed as a financial resource that the court will take into account when determining a fair financial outcome under Section 25 of The Matrimonial Causes Act 1973. What makes farming cases more difficult is that there is often a great deal of sentimentality attached to the farm given that it is likely to have been passed down through generations and it is additionally complicated as the farm is usually the couple’s home and business. The farmhouse is likely to be integral and difficult to divide on divorce without adversely affecting the farming business.

When entering into marriage it would be beneficial for farmers to consider entering into a pre-nuptial agreement. Whilst these are not automatically binding, they have become increasingly popular and where specific criteria have been met, they can be given decisive weight by a court if the court process is utilised by the divorcing couple. Farmers entering into marriage must be aware that inherited assets are not excluded when going through a divorce and the court will reach a conclusion based on what is a fair outcome with reference to the case of White -v- White [2000] FLR 981, the principle being :- as a starting point, and provided there is no good reason for doing otherwise, it is fair to divide the assets equally.

Given that most farming cases do not have significant liquid assets, as capital is often tied up in land, it can be difficult to meet the parties’ housing and income needs without having to sell off assets. Needs are key on divorce and may have to be met from farming property. Farming cases often involve third parties such as the farm accountant and land agent to help lawyers and judges understand the practical arrangements of the farm and it may be necessary to obtain reports from such experts, increasing costs. Divorce is an expensive process. It is therefore extremely important for farmers to consider entering into a pre-nuptial agreement to set out what should happen in respect of the farming assets in the event of marital breakdown.

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