A rural law expert has provided advice on the main differences between a ‘typical’ divorce and a farming divorce, providing tips to help farmers navigate the process.
Farming divorces can often be complicated and difficult to resolve, according to Jenny Arnold, senior associate solicitor at JMW Solicitors.
Her advice below addresses the common myths associated with divorce, how to ensure assets are protected and how divorce for farmers differs from other types of divorce.
What are the similarities?
In any divorce, whether it involves a family farm or otherwise, the financial claims that can be made against the other spouse are the same.
Divorcing spouses have claims in relation to income, capital, property and pensions, as well as claims against any business owned by either party to the divorce (which includes a family farm).
The extent of any such financial claims will differ on a case-by-case basis, therefore, it is advisable to seek advice from a solicitor specialising in family law from the outset.
Furthermore, both spouses will be required to provide full and frank disclosure by way of documentary evidence to show the extent of their current assets, income and liabilities.
The early exchange of financial disclosure can often prevent delay and legal costs from escalating.
In farming cases, for example, you would be expected to provide full farming accounts, management accounts, secured and unsecured lending, income and expenditure details and documentary evidence to show the ownership and extent of the farming estate.
What are the differences?
Farming families are complex; their property and business assets are often the subject of diverse forms of ownership.
The integral role that the farm has played within the family in generations past, along with the role that it is intended to play in those to come, can present complicated legal challenges when a member of the family gets divorced.
In many cases, it may be that the farm, its buildings and surrounding land provided a family home and an income for the divorcing couple and their children for the duration of the marriage; however, they may not actually own any of these assets.
Unlike ‘typical’ divorces, in farming divorces, it is common for the parents of a divorcing spouse to own the farm and associated assets.
Complex succession planning will often have been undertaken to preserve the family farm and ensure that it remains within close family ownership.
In some cases, older farming generations may have taken steps to ensure that the farm is bequeathed to any bloodline (frequently male) grandchildren upon the death of their grandparents, thereby skipping a generation.
Whether or not these decisions are taken in anticipation of marital breakdown within the family, they have a significant impact on the ability of the court to satisfy the parties’ financial claims arising from the marriage.
The party to the marriage that is not a bloodline relative of the farming family is typically in a weaker position.
High levels of acrimony are likely to ensue where they have little option other than to look to the farm to meet their financial claims arising from the marriage.
Sadly, this may damage irreparably relationships between one or both of the divorcing couple and their extended family.
What are your options?
In a divorce, particularly farming divorces, there is never just one way to skin a cat. At the outset, you should be aware that going to court is not your only option.
Often parties to a divorce can negotiate an agreed financial settlement with the assistance of solicitors without the need to involve the court.
The advantage of finalising matters this way is that both parties have the benefit of expert legal advice, but neither party will incur the legal expense of contested and protracted court proceedings.
Another option to resolve matters is ADR (alternative dispute resolution). Mediation, collaboration and arbitration are all good alternatives to the court system.
The legal costs are usually less than contested court proceedings and a resolution can often be achieved in a quicker and less acrimonious way.
ADR may not be a viable option for you if your relationship with your spouse is particularly difficult as a measure of agreement and co-operation is required to engage in the process of ADR.
Court proceedings should be seen as a last resort. However, an application to the court may well be the best way to hold unreasonable parties to account or ensure co-operation with the process.
Prevention is better than a cure
In many cases, a farm has been in the family for generations and the intention is for the future generations to inherit and run the farm.
If you are seeking to preserve the farm for the next generation, it is advisable to ensure that any family member who is set to inherit the farm (be it children, siblings, nieces or nephews, etc.) enters into a pre-nuptial agreement prior to their marriage.
A pre-nuptial agreement can record how the family farm should be treated upon any future divorce. As above, financial claims can be brought against the farm by a non-owing, non-bloodline spouse.
To prevent financial claims being asserted against the farm upon divorce, before any interest in the farm is passed on, the farm-owner should insist upon the next generation entering into a valid pre-nuptial agreement that specifically ring-fences the intended farmer’s interest in the family farm prior to that person’s intended marriage.
If the horse has already bolted, and the next generation of farmer has already got married, there is always the option for the spouses to enter into a post-nuptial agreement to preserve the family farm in the event of a future divorce.
It is important that each party to a pre-nuptial or post-nuptial agreement seeks independent legal advice in relation to the terms of the agreement.
Furthermore, any pre-nuptial agreement must be entered into and signed by both parties no later than 28 days prior to the date of the marriage.
It is essential that any pre and post-nuptial agreements make adequate provision for any children of the family.