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My son is a partner in the farm business and he is getting divorced. Are we going to lose the farm?

Every case is different, and the outcome will depend on the specific facts.

When dividing assets on divorce, the Court is obliged to apply the factors set out in Section 25 of the Matrimonial Causes Act 1973, which includes needs, resources, contributions, the length of the marriage, obligations (such as independent children) the ages of the parties, and so on. The Court must apply these principles to achieve fairness to avoid discrimination, and should consider an equal division of the assets. In applying the Section 25 factors, if there is not to be an equal division, then there must be justification for this.

In the past, farmer’s wives often did relatively badly on divorce. Since the well-known case of White v White (2000) the legal landscape has changed.

Mrs White, with her husband, was an equal partner in a farming business that they had built up together over a life time of work. She was not prepared to settle for an arrangement which was designed to meet only her “reasonable needs” and for the farming assets to be transferred to her husband. This would have been the case before she went to The House of Lords. Instead, Mrs White succeeded in establishing the principle that after a long marriage of full and equal contributions the assets should be broadly divided equally.

Further, the Order in which the Court will broadly seek to divide assets will be in the order of needs, compensation (if applicable) and, if there is a surplus, sharing. Problems arise where there are unequal contributions by one party, or assets were pre-owned, or inherited. In these cases the Court will probably depart from an equal division. The best way to explain how this works in practice is to give some broad examples.

Where the son is a partner in the farming business, but the land, house, and agricultural buildings are owned by the son’s parents, and are not therefore assets on the farming partnership balance sheet, then it is extremely unlikely that the farm will be lost. This is not to say that the partnership may not face challenges in raising capital to fund the wife’s needs, but a Court cannot make assets which do not belong to the son subject to a settlement on his wife.

In a situation where the farm, land and buildings, the live and dead stock are balance sheets assets, but where the assets are not part of the matrimonial acquest, and have never been vested in the wife’s name, again, it is extremely unlikely that the Court would want to destroy the farm business. The son would have to consider funding` the wife’s settlement, either by borrowing or by looking at, for example, the sale of non-core assets such as redundant cottages or barns.

The size of the wife’s claim would depend on all sorts of additional issues, such as whether the children will be staying with the son or living with the wife, the ages of the children, the liquidity of the farm and its profitability, the ages of the son and his wife, and the length of the marriage.

Where a short marriage fails, and the son and his wife are relatively young and childless, then the size of the wife’s claim is going to be small.

After a long marriage involving several children, particularly where the wife has not been able to establish her own career, then the size of her claim is going to be much larger.

On the other hand, in a case where the husband and wife have used joint marital assets to fund the purchase and capital of the farm, and in particular where assets are vested in joint names, then there is a significant risk that the son may lose the farm on divorce, especially if the wife’s needs are large, if there is insufficient ability to raise adequate capital.

There are also other unique factors which apply to farm businesses, and in a situation where a son is facing the break-up of his marriage, then it is imperative that expert advice is taken at an early stage so that options and timescales can be explored.

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