It’s never an easy decision to end a marriage, and there are many factors to consider. Any divorce involves having to come to an agreement on the division of assets, but when a marriage is closely tied into a farming business, this can throw up additional challenges.
It is often the case that many couples who are farm owners want the farm to continue to operate, and remain viable once the divorce is completed. The asset structure of a farm can be particularly complex and valuations are often required for land, property, livestock, plant and machinery. There are often other intangible assets, such as subsidies to be considered. These must be offset against the mortgages and borrowing facilities of the farm.
Each farm has a unique history – many have been in the family for generations, sometimes with rules of succession in place. Others have been built up during the marriage by both parties. Sometimes there will be a Partnership Agreement but this is not always the case. Without one, tax implications may arise from the division or sale of land and assets, making specialist accountancy advice essential.
For any divorce, court proceedings are a last resort. Napthens will always explore alternative dispute resolution such as mediation, which can result in an agreement that allows for a fair distribution of assets, protecting the viability of a farm for one or both parties.
For anyone in business together, there should always be a Partnership Agreement in place, which describes how the business should operate, and how it would be dissolved if it ever became necessary. For couples about to get married, a prenuptial can also be prepared which sets out plans for what happens if the marriage were to break down. This is particularly important for any inherited assets which need to be protected. If you are already married and have no pre-nuptial agreement in place, it is possible to cover these issues retrospectively with a post-nuptial agreement.
A divorce involving a couple who own a complex business like a farm can present unique challenges, but they are not insurmountable. At Napthens we have both the experience and expertise in dealing with such cases, and together with specialist accountants and valuers, we can achieve an outcome that meets your objectives.