Farming and marriage/relationship breakdowns

With the sun beginning to make an appearance, the harvest season will soon be in full swing. Even though this is a vital time of year for our local farmers and businesses, it can also bring vast amounts of pressure on marriages and relationships.

Agricultural divorces are often complex and require sensitive handling. Farms can often be more difficult to deal with than a regular divorce for a number of reasons:

  • The value of the land and property can be very substantial when compared to the income received.
  • Farms are often inherited and have been in the family for many generations with wider family members often having part ownership or a vested interest. The farm itself is a lifestyle in that the farmers and their families will often work and live on the premises. Therefore, extracting capital can be difficult.

Usually, the starting point for a settlement in divorce, particularly with a long marriage, is an equal division of assets. However, when it comes to dealing with a family farm and farmland, this will not always be the case especially if one party has inherited the farm.

There are large amounts of case law in this particular area showing that divorces within the farming industry are certainly not straightforward. In the case of D v D [2010] EWHC 138 (Fam), the husband owned the majority of a farming company established by his father in 1952. The husband argued he should retain 100 per cent of the assets he had inherited. The court rejected the idea that the case should be treated differently simply because the business was a farm. The outcome was that the husband retained control of the business but that the likely longer-term success based on a recent £3 million investment, should be taken into account. As a result, the wife was awarded the family home with a value of £950,000, a lump sum of £1.5 million, and maintenance of £44,000 a year.

The case of P v P (inherited property) [2004] EWHC 1364 (Fam) concerned a 16-year marriage with two children. Both husband and wife worked on the farm that had been in the husband’s family for four generations. The wife sought an equal division of the assets worth approximately £2.5 million. £2.1 million of the assets were held solely by the husband and represented his inheritance. It was found that the wife contributed physical labour as well as administrative work on the farm. Despite this, her settlement was £575,000 which represented just over 25 per cent of the family assets. The court based this on the ‘overarching requirement of fairness’ on the basis that the bulk of the family wealth was inheritance from previous generations on the husband’s side and the fact that any higher award would require a sale of the farm. The award was justified on the basis that it was deemed ‘enough’ to meet the wife’s needs.

As can be seen from the above cases, there can be many difficulties and uncertainties that divorcing couples may face where there is a family farm and farmland. It is therefore important to set up measures to protect all assets right from the beginning of any new relationship.

Cohabitation Agreements

Cohabitation agreements are frequently entered into by cohabitees who want to regulate their financial and living arrangements both during cohabitation and if cohabitation comes to an end. They are usually entered into by couples who have decided not to marry but have decided to live together. A cohabitation agreement will record the arrangements reached between the parties including rights and responsibilities in relation to the property where you both live or intend to live, financial arrangements between you, both during and following cohabitation and the arrangements to be made if you both decide to no longer live together.

A  cohabitation agreement can avoid the cost of litigation about former cohabitees’ respective beneficial interests in the home that you have shared if your cohabitation ends.

Prenuptial Agreements

Prenuptial agreements are a written agreement between a couple prior to marriage. The purpose of a prenuptial agreement is to set out ownership of all belongings including assets, money and property. The agreement itself can provide clarity to both parties by setting out how the assets will be divided should the marriage come to an end.

For farmers, these assets will include the farm and the various agricultural machinery contained within the farm. A prenuptial agreement is therefore a practical approach to protecting the farm and the livelihood of the family.

In order for a prenuptial agreement to carry weight in court, it must be entered into freely and the outcome cannot result in an unfair settlement for either spouse. To be able to achieve this, it is recommended that both parties seek their own independent legal advice to discuss the individual case and needs of the parties. Here at Rudlings Solicitors, we would be more than happy to assist and as a team, we have dealt with many farming divorce matters, both large and small and can therefore provide you with detailed and informed advice.

Victoria Gale-Masterson

Family Solicitor

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