Farmers are often under-recognised for the essential role they play. They produce the food that sustains us all, yet many work long hours in challenging conditions while facing increasing pressure on margins. For many, farming is not just an occupation but a legacy—caring for land that has been passed down through generations, along with the significant responsibility that comes with it.
Divorce presents a considerable risk to family wealth in farming families. Although the courts can consider the source of assets, they have the power to make awards that impact non-matrimonial property. Cases involving family farms are often complex, making it crucial to obtain specialist legal advice.
Decisions made concerning the farm’s succession plan, development or structure, during or before marriage, can have significant (and often unforeseen at the time) negative consequences in a Divorce. We regularly provide farming families with advice that draws upon our specialist Private Client and Family Law teams to ensure that families fully appreciate and understand the wider effects of any decisions made by them concerning the family farm structure.
Here are six points to consider:
- Transferring land into joint names: often for perfectly sound estate planning reasons farmers are encouraged by professional advisers to transfer land or property assets to their adult children or to extended family. This can lead to arguments as to whether it was intended that those assets were (or have become) matrimonial and if so then shared. Please see our previous article What’s mine is yours? – Greene & Greene
- Pre-nuptial agreements: pre-nuptial agreements can seek to protect the dynastic farm from claims in Divorce. The current custodians are often best placed to insist that their child or family member enter into a nuptial agreement to protect family assets.
- Making your spouse a Shareholder of a Limited Company or a Partner within a Partnership: for tax reasons you may be advised to appoint a spouse as a Shareholder or Partner in the family farm. Once that party has been given an interest in the business this may mean buying back their share or interest in any Divorce negotiations.
- Wills: it is essential that you make a Will, and review this throughout your lifetime, to ensure that your estate passes to your chosen beneficiaries in the event of death. Failure to have a Will means that your estate will pass in accordance with the rules on Intestacy and can lead to additional costs and delay in administering the estate. Within your Will you can name your executor and trustee. You can also consider succession planning for tax purposes and make reasonable financial provision for your dependents.
- Keep records: having a record of how you acquired an asset and the contributions you have made prior to, and during, the marriage can assist with supporting or resisting any financial claims in a Divorce.
- Get advice: in the event of an impending Divorce or separation, it is imperative that early professional advice is sought before any assets are distributed as part of a financial settlement. In these circumstances, we commonly liaise with other trusted advisors including accountants, land agents and financial advisors.
The Family team at Greene & Greene has a wealth of experience and a proven track record of success in farming cases. The team is also able to call upon specialists in the Agricultural Property and Estate Planning teams to deliver creative and bespoke solutions.
For more information on the services offered by Greene & Greene Solicitors please visit www.greene-greene.com.
This is only intended to be a summary and not specific legal advice.
