How Farms Are Treated in Divorce Settlements

How Are Farms Divided in a Divorce?

Farms present unique challenges in divorce settlements. They often combine business, property, inheritance, and family legacy - making them more complex than typical asset division. UK courts aim to balance fairness with practicality, especially when the farm is a source of income or has been in the family for generations.

Is a Farm Considered a Matrimonial Asset?

It depends. Farms may be:

• Matrimonial assets if acquired or developed during the marriage
• Non-matrimonial assets if inherited or owned before the marriage

The court will consider if the farm was 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.

Note: Even non-matrimonial farms may be included in the settlement if needed to meet the other party’s financial needs.

Key Factors Courts Consider

When deciding how to treat a farm in divorce, the court will assess:

• Ownership structure (sole, joint, partnership, or company)
• Source of the asset (inherited, gifted, purchased)
• Use of the farm (commercial vs. lifestyle)
• Contribution of each spouse (financial and non-financial)
• Housing and income needs of both parties

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.

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.

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 considered when working towards a fair settlement.

Can a Farm Be Ringfenced?

Yes, in some cases. If the farm was inherited and kept separate from marital finances, the court may ringfence it, especially if the other party’s needs can be met from other assets. However, if the farm was used to support the family or both parties contributed to its success, it may be treated as a shared asset.

How is a farm valued in a divorce?

arm valuations can be complex and may include:

• Land and property value
• Machinery and livestock
• Business goodwill
• Debts and liabilities

Expert agricultural valuers are often instructed to provide accurate assessments.

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.

Protecting Farming Interests

To protect a farm in divorce:

• Consider a prenuptial or postnuptial agreement
• Keep inherited assets separate from marital finances
• Maintain clear records of ownership and contributions

Vardags’ team of top divorce lawyers delivers a bespoke legal service to HNW and UHNW individuals, their families, and businesses.  

Our expert family lawyers have extensive experience handling complex agricultural divorces. We can help protect your farming interests while ensuring a fair financial outcome. Contact Vardags today for a free initial consultation.

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Frequently Asked Questions

Q: Is my farm safe in a divorce?

A: Not automatically. The court may include it in the settlement if needed to meet the other party’s needs.

Q: What if I inherited the farm?

A: Inherited farms may be ringfenced, but only if they weren’t used for family purposes or mixed with marital assets.

Q: Can I keep the farm and give up other assets?

A: Possibly. This is known as offsetting, and it depends on the overall asset pool and needs.

Q: Will the court force a sale of the farm?

A: Rarely. Courts try to avoid disrupting viable businesses, especially those tied to family legacy.