Divorce when you own a farm
A farming family can sometimes have a complex business structure. In some cases the land and farmhouses will be owned by the members of the family but then rented to a company that they have set up to run the farming business. The owners of the land might also span several generations, from grandparents down to great-grandchildren. The shareholders of the company are likely to be various members of the family, some of whom will be employed by the company.
To the farming family, these relatively complex arrangements need to be put in place to help shield assets from all possible events that could threaten the business. One such event is when a member of the farming family business finds themselves in need of a divorce.
Take the scenario of a husband and wife whose children are all adults and living independently. The husband’s farming activities are carried on through a long established family company. He is a shareholder in the company and expected to inherit further shares on his mother’s death. He is employed by the company as the farm manager for which he is paid an income. The company has assets of £4 million which includes ownership of some of the land. The wife has lived in the farmhouse throughout the marriage but after the divorce is finalised she would like to move into a home of her own.
Although the husband has shares in the company, which are valuable, he has few other assets in his own name. The main issue for the court to consider is how to enable the wife to vacate the farmhouse and move to other accommodation that meets her housing needs, while also making sure there is adequate provision for the husband to meet his housing needs too.
The court has a wide range of orders it can make and can use its powers at its discretion, provided it has considered all the factors set out in s25 Matrimonial Cause Act 1973. These factors include the source and nature of the assets, the length of the marriage and how properties have been owned during the time of the marriage.
For anyone who is involved in a family farming business and is contemplating or going through a divorce, it is important that expert legal advice is sought from a solicitor who not only has matrimonial expertise, but who also understands the complex nature of a farming business.
A version of this article appeared in the East Anglian Daily Times on 21 February 2015.
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