Agricultural Divorces: A Field of Their Own

Agricultural divorces are often complex and require expert attention.

Some farms are very successful enterprises: they may comprise valuable properties and land holdings, machinery and stock.

The farm may have diversified into several areas, each business producing its own income stream.

The farm may also have developed a national or regional reputation for supplying excellent produce and meat.

Other farms may own valuable land and properties, but the business may only produce a modest profit.

Farmers sometimes rent rather than own the land, and the business may be run profitably.

In most cases, farms have been run as a family concern through the generations, with the expectation that the next generation will be responsible for taking on the farm.

Divorce affecting farmers may have a major impact on the farm and other family members' interests in the farm.

Farms may be run as a company, partnership, or sole trader. Trusts may have been established to protect the farm and its core businesses.

Prenuptial agreements may also have been entered into at the start of the marriage to protect the farm.

Farmers often have strong professional links with local RICS surveyors and agricultural consultants.

Therefore, you must instruct a Family Solicitor who specialises in Farming Divorces and appreciates the specific idiosyncrasies involved when undertaking a valuation of a farming business on divorce.

Both parties to a divorce have a duty of full and frank financial disclosure of all financial assets, liabilities and income.

This will include valuations of the farming land, the business itself, the business accounts, bank accounts and evidence regarding any income stream.

In addition, the farm owner may be a party to a Stewardship Agreement, which provides an annual income.

Many farmers also receive annual financial entitlements as part of the Basic Payment Scheme.

These financial incentives are a valuable source of income.

Therefore, both parties need to ensure that specialist and professional experts are involved at an early stage for land valuations, valuations of entitlements, tax advice and business strategies.

Whilst it is unlikely that a farm will be sold on divorce, enquiries will be made as to how much capital or income can be made available to secure a divorce settlement for the departing spouse and any children of the family.

In some cases, wives have worked without payment within the farming business for many years, and her involvement may have become integral to the smooth running of the farm.