On divorce, the court’s task is to achieve a fair outcome, taking into account all the circumstances, including the parties’ needs, resources, contributions and the welfare of any children.
After years working on the farm many spouses expect their efforts to be reflected in the financial settlement on divorce. However, farming cases can present particular challenges, especially where the ownership and control of assets sit outside the marriage.
Why farming cases can be more complex
- Ownership structures
Land and key assets are often owned by third parties, such as parents or grandparents, or held within partnerships or companies. A spouse may have worked on the farm for decades without holding legal title, creating difficult questions as to what resources are truly available. - Lack of liquidity
Farms are often asset rich but cash poor. Selling land, livestock or machinery may undermine the business, so courts can be mindful of the impact of making such orders. - Protective arrangements
Pre and post-nuptial agreements, trusts and other protective arrangements are common in farming families to preserve the farm for future generations and will influence the court’s decision-making. - The matrimonial home
The family home is often situated on the farm. Even where alternative accommodation is available on the farm, remaining living close to an ex-spouse and their family may cause difficulties, while rehousing elsewhere can require capital that is not readily available. - Tax considerations
Any transfer or sale of land or machinery can trigger significant tax consequences and will need careful consideration and often advice from a tax professional.
A practical example
We recently acted in a case involving a multi-generational farm with a diversified business that included a farm shop. Most of the farming assets, worth several million pounds, were legally owned by the husband’s father, not by the husband or wife. Although the husband expected to inherit the farm in due course, his own legal ownership was limited. Recent capital expenditure on the farm shop had also affected cashflow, reducing the scope for an immediate capital settlement.
The wife had, however, spent many years supporting the farming business. She claimed a beneficial interest in the converted farmhouse cottage that served as the matrimonial home, relying on alleged assurances that assets would be transferred into her and her husband’s names. In fact, legal ownership remained with the father.
The father was joined to the proceedings as an intervenor, creating the potential for complex and expensive litigation to determine beneficial ownership.
A fully contested route would have been costly and uncertain. Instead, a pragmatic settlement was negotiated, the wife remained in the matrimonial home with the parties’ four children until they reached adulthood, following which she would receive a lump sum to enable her to rehouse. Practical steps were taken to make that arrangement workable, including the creation of a new driveway and associated boundary works to the property to afford greater privacy, recognising the difficulty of continuing to live surrounded by her ex-husband’s family. The structure allowed time for the farming business to generate liquidity without forcing a sale. While the lion’s share of the assets were legally owned by the father, he recognised the importance of ensuring his grandchildren were adequately provided for and was willing to facilitate a solution.
A need for pragmatism and creativity
Farming cases are rarely just about two individuals. They often involve a wider family business, competing interests across generations, and assets that cannot be easily divided. As this example demonstrates, practical and creative solutions can often achieve a fair outcome while avoiding the cost, delay and emotional strain of protracted litigation.