Carving up a family farm after divorce or separation

While January is a time of new resolutions and fresh starts, Christmas may have been a difficult time with strained relationships in hard-pressed farming families, many of which are still struggling with the aftermath of Brexit, Covid and the current cost-of-living crisis.

It is little wonder then that the first Monday of January is known amongst family lawyers as ‘Divorce Day’, with so couples having reached breaking point and looking to split up or file for divorce.

Divorce or separation is always a stressful time, as couples seek to split their joint belongings and make arrangement for their children, but can be especially difficult for farming families whose assets may not be easy to divide, as Robert Bellhouse, family law specialist at Ware & Kay Solicitors in York & Wetherby explains.

When couples divorce, the starting point for any financial settlement will be a 50:50 split. However, things get more complicated for agricultural families because a farm is often passed down through generations and owned by different members of the wider family.

This, and the fact that a farming business can be held in a number of different ways – for example, as a partnership, a limited company or a trust – makes it sometimes difficult to pinpoint who owns what. Adding to the complexity is the fact that the family home is usually a couple’s most valuable asset, but to sell the farmhouse may mean the demise of the farming business, which a court will be loath to sanction.

If you and your partner do not have a prenuptial agreement or a cohabitation agreement in place – both of which would outline your entitlements in the event of a split – it may be the sale of the farmhouse is inevitable. However, as a couple you may have cash or other assets which can be sold to enable a fair financial settlement to be reached while ensuring the survival of the farming business.

If you are unmarried and you own property in joint names, the amount you receive will depend on whether you hold the property as joint tenants or as tenants in common. If the former you are entitled to half its value; if the latter you will receive only the amount you contributed to the purchase, plus your share of any subsequent increase in value.

If the property is in the sole name of your cohabitee, you have no automatic right to an interest in the property, no matter how long you have lived with your partner. However, if you contributed financially to the property and that has increased its value, the court may rule that you are entitled to a beneficial interest in the property.

Whether you are married or co-habiting, it is better to hammer out a fair financial settlement between you which can then be approved by the court, rather than asking the court to decide for you which can prove both time-consuming and costly. This could involve alternative dispute resolution methods such as negotiation, mediation or collaborative law.

One of our family lawyers, who specialises in advising farming families on divorce, can negotiate a settlement on your behalf without you having to get involved. Or, if you want to be more hands-on in the process, you could opt for collaborative law where your solicitor sits down with you and your partner and your partner’s legal representative and offers legal advice as you thrash out a deal. The other alternative is mediation, which involves an independent trained mediator, talking through the issues with you and your partner, without taking sides, to help you reach an agreement.

How we as your Solicitor can help

If you are considering divorce or separation from your partner, it is imperative to first seek expert legal advice.

As specialist family lawyers we can outline how the divorce or separation process can work to your best advantage, refer you to specialists to help you value your assets, and act on your behalf in any court or alternative dispute resolution process.

We can also provide advice on inheritance issues, whether you should draw up a new Will during your separation, or whether spending limits should be placed on credit cards, overdraft facilities, and bank accounts and as the divorce or separation is going through.

For more information on divorce or separation for farming families, or any other enquiries regarding family law, please contact Robert Bellhouse on York, 01940 716000, Wetherby 01937 583210 or Malton 01653 692247 or email robert.bellhouse@warekay.co.uk to see how we can assist.