Farming is an entire lifestyle, not just a job and business. More often than not liquidity is difficult to come by bearing in mind the nature of the assets. The family home itself is often an asset of the business, with the resulting accounting treatment.
There are a number of challenging features for family lawyers to address; not least the nature of the assets, the history of the farming business, the history of the relationship, and the interests of any other business partners and/or family members.
The family court will need to assess a fair financial outcome for both parties to the marriage. In farming cases this can be fraught with difficulty. If there are insufficient assets to satisfy both parties needs then there may need to be an assessment as to whether or not capital can be released from the business. In increasingly tough times for farmers, such a significant withdrawal from the business may well have significant financial implications. It is a very fine balancing act.
In addition, farming cases can bring up interesting and complex discussions surrounding inheritance and matrimonial vs non-matrimonial assets. A family farm is often passed down from generation to generation. If acting for the farmer, a family lawyer will be interested in preserving as much of the family business as possible, on account of the special nature of the inherited assets. If acting for the non-farming spouse it will obviously be the opposite approach; to establish that the endeavour of the spouse and the treatment of the assets means that they have become matrimonial in nature and should be divided accordingly.
It is important as a family lawyer to get as much information as possible at an early stage and plan a sensible negotiation structure, for the benefit of all involved. With foresight, many farmers and future spouses would be best advised to enter into a pre-nuptial agreement to avoid the complexities and uncertainty of a financial dispute on divorce.
At Lupton Fawcett we are well placed to advise on all issues concerning a family farm. Alongside our solicitors in our specialist family law department we have expert advisers in tax, agriculture and landed estates, commercial property and family businesses.
For advice regarding a farming divorce please contact Andrew Smith in our York office, Chris Burns or Sophie Arrowsmith in our Leeds office or Richard Buckley in our Sheffield office.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.