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The complexities of a farming divorce

Separation and relationship breakdown can be emotionally and financially challenging for everyone involved, but when it comes to farming families, the consequences are often far reaching.

The emotional and practical upheaval can seem daunting and often, there are other complex and factual issues that make these cases more challenging and create much debate regarding the parties’ contributions to the marriage and how the resources should and can be shared.

The farm may have been in the family for generations and represent a way of life and this adds to the difficulty of achieving a clean break, especially where there is the wish that it passes to future generations.

The business structures that operate the farm, as well as occupational arrangements, may involve wider family members as part of a partnership or a limited company, so the decision makers may not just be the parties to the separation.  There may be liquidity issues within the business that could be compounded by the prospect of the sale of land and impact on the ability of the business to obtain and service borrowing.  The full impact of Brexit is still unknown and the changes to farming subsidies and the implementation of the Agriculture Bill – together with the proposed reform of agricultural tenancies – will bring huge changes to how farms operate in the future, adding to the potential complexity.

Keep it out of Court

The overall aim when settling a farming divorce is to achieve an outcome that is fair for the parties, but given the complexities outlined above, how can this be achieved?

The parties will know their farm the best and therefore if they cannot find a solution they are left with the unenviable situation of a Judge, who may not have ever set foot on the farm, making a decision for them, which could have an impact on the whole family and future generations.

Take legal advice

It is important that legal advice is obtained on how the law and legal authorities will be applied in light of their circumstances – but this may just be the start.  Taking a holistic approach when looking at how this would apply in practice may help the parties move towards a workable resolution that can be cross checked with the principle of fairness.  This is a discretionary exercise rather than an exact science and no two situations are the same.

Achieving resolution

Protracted and costly court proceedings can be avoided if the parties settling a farming divorce are willing to adopt a positive and constructive approach. The following are some of the essential building blocks to achieving an amicable and constructive resolution that minimises conflict and costs:

  • Don’t forget, where there are minor children, the arrangements that you decide will have an impact on them. The working arrangements need to be considered and how this can be achieved may need more creativity in farming cases.
  • Work with your existing and trusted advisers, such as land agents, farm business consultants, agronomists, bank managers and accountants. They understand your business and can share important information that could impact on your decisions and how any proposed settlement could be put into effect.
  • Consider whether any further independent expert advice is required, along with the extent of and nature of those instructions and the input they will have in negotiations.
  • Appoint the right legal representative – someone you can work with – who has experience in advising agricultural clients and a sound understanding of how farms operate. You do not have the time to be teaching your adviser the basics of how a farm works.
  • Contested proceedings should be a last resort. I would actively encourage parties to consider alternative forums away from the Court room, including mediation.  Mediation is voluntary and conducted in a relaxed, confidential and impartial setting.  The mediator will not provide an opinion but will work with you to share ideas and options that will hopefully help you reach an informed decision together that works for you and the family.
  • Always have in mind proportionality and how costs will be paid. Ultimately the cost will be coming from the marital ‘pot’, and the more of this that is spent on costs, the less there is to share.

Click here to see Oliver’s summary article, recently featured in the Ryedale show guide. 

For further help and advice around settling a farming divorce, the topics discussed in this article, or any other matters related to family mediation or rural affairs, please get in touch with Oliver Hall, partner and family mediator, by calling (01904) 275250 or emailing enquiries@andrewjackson.co.uk

 

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