The Family Farm on Divorce

A farm can be a wonderful asset to a family. Often multiple agricultural buildings and dwellings can be divided between family members, enabling them to pursue their own business ideas and remain proximate to their kin. Frequently, the farm remains the property of one or two members of the family, often the parents, while available accommodation, buildings and land are occupied by the children on an informal basis, perhaps with a view to them inheriting their parts of the farm in due course.

However these arrangements can be severely tested should a child’s marriage come to an end. The informal nature of the occupation may be challenged. The suggestion may be made that the child has more rights to the property than first appears, that although legal ownership of the property may be in the parents’ name, the parents hold the property on trust for the child and/or his/her spouse beneficially.

An example may be where the child and/or his/her spouse have undertaken substantial work or renovations to a residential property on the understanding that they have or are to have a beneficial interest in it. The casual remark ‘don’t worry – all this will be yours one day’ or ‘what’s mine is yours’ when a child suggests that he or she might carry out work on the home may be enough to establish a beneficial interest. The erection of buildings on farmland might also trigger beneficial ownership if such remarks have been made.

On a divorce, a claim by a child’s spouse that a beneficial entitlement to land or property has arisen can be costly to refute and even more costly if established. Inevitably the owners of the land/property have to participate in the divorce proceedings, which usually involves paying for representation from solicitors and strained family relations.

Farm owners need to be very cautious about how they approach these situations. They should make clear to their children and their spouses, preferably in writing, the terms upon which they occupy property or land, whether as licencee (the most informal type of occupation) or as a tenant, having first taken legal advice on the implications of offering these types of occupation. If any suggestion is made that work will be done to a property or that buildings will be erected, then it should be clarified, in writing, that ownership of the property/land remains with the parents as legal owners.

A version of this article appeared in Country Life on 11 July 2015.

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