How are farms treated by the courts in divorce?

Farms can be more complicated than other assets to deal with upon divorce, and often require sensitive handling. This is because unlike other businesses, farms are typically income light and capital heavy and may consist of a number of different assets, for example, the land, livestock and machinery. Additionally, it is not uncommon for the family home to be located where the day to day running of the farm takes place.

Many farms are often inherited by one party prior to a marriage and can be owned by various members of a family. As such, there may be other parties’ interests to consider. Moreover, many farmers will want the asset to be retained because it generates income and often desire to leave it to future generations.

Common Considerations with Farming Divorces:

1. Is the farm a matrimonial asset?

One of the first things to be considered is whether the farm is a matrimonial asset. The court will consider if the farmwas owned by one spouse prior to the marriage, and even if it was, it is possible that both parties subsequently invested in additional agricultural property or land to expand operations.

The non-farming party may have also contributed financially or have worked on the farm during the course of the marriage. The question of how much input the non-farming spouse had with the running of the farm can be crucial to determining whether it can be classified as a matrimonial asset or not.

2. Who owns the farm?

It is commonplace for farming businesses to be owned by multiple people in the same family, often in the form of a limited company or a partnership. It is also possible that all the farm assets are owned by the parents of a divorcing spouse, adding an additional layer of complexity to the process.

3. What if the farm was inherited?

This feeds into point 1 regarding whether the farm is a matrimonial asset. In cases where farms have been inherited, it would have been expected that the business would be handed down for generations.In such cases,, a court is likely to viewthe farm as non-matrimonial and ring-fence it from division.

However, there are additional factors such as the length of the marriage and whether there are any children which need to be considered. If the farm is the most significant asset owned by either party, it may have to be invaded to meet to the other spouse and children’s needs.

4. Who else has an interest in the farm?

It is not unusual for farms to be family-run businesses and for third parties to have vested interests in the company beyond merely owning it. For example, the farm may have a farmhouse which is home to multiple marriedcouples, or several different family members may count on the farm for employment and income.In such cases, the needs of everyone involved will have to be consideredwhen working towards a fair settlement.

How is a farm valued in a divorce?

It is important to consider all assets contained with the farm during the valuation process. This includes all land, buildings, machinery, livestock and any business structure.

Will I need to sell my farm as part of divorce?

It is uncommon for a court to order the sale of a farm as part of a divorce settlement. This is mainly because the sale of the farm would take away the farm owner’s source of income and often, also their home. Additionally, in situations where others have an interest in the farm, the sale of a spouse’s share would impact them. However, ultimately, this depends upon the other available assets and the needs of both spouses.

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