These are testing times for farmers and farmers’ wives. For many there are three partners in the relationship – the husband, the wife and the farm! Wives are married to men who are wedded to their job, facing the pressure of long hours, often working in isolation and for relatively low return. Factor in the demands of a mountain of paperwork in a heavily regulated industry and it's no wonder stressful lifestyles put a severe strain on their personal relationships.
This in turn poses a dilemma for farmers' wives. Do they get a job away from the farm to help swell the family coffers, or will it heap yet more pressure on their husbands with a heavier workload and less practical and emotional support at hand.
If the marriage breaks down, farmers' wives then face the prospect of a financially and emotionally ruinous divorce, as most farmers risk losing their families and their livelihood. Even though many farmers may be cash-poor, most modest-sized farms usually enjoy significant market value.
Quite simply divorce, albeit a last resort, could mean the loss of a family, the sale of the business and all of its assets.
When any business is regarded as a family affair, any valuation or division of assets has traditionally been a contested area when marriages break down. This has come under the spotlight even more in recent years given the courts' renewed emphasis on the principle of "fairness" and the "equality yardstick", when assessing and sharing assets. Some farming cases present acute problems, particularly if the farm has been passed on through a number of generations.
There may also be issues over the way a farming business is operated, which might affect the value as well as the liquidity of the assets available to the parties. It may be that the farm operates as a limited company, partnership, trust, or a combination of all three. Any assessment of value will require consideration of the interests of third parties, shareholders, or partners, as well as those of the separating couple.
Therefore, it is vital to establish precisely how the farm business is operated and exactly who owns what. Particular care is needed when considering tenancies, whether they have been created formally or informally, because the nature of the tenant and tenancy will affect the value of the assets available to the divorcing couple.
All assets need to be assessed and taken into consideration They include everything from the land and property, to livestock, machinery and equipment, even any intellectual property rights to, say, specialist working practices or innovative agricultural techniques developed on the farm.
It may also be necessary to factor into the valuation any spin-off operations like holiday lettings, tenancy income, covenanted woodland, mineral rights, farmland bought at preferential rates well below the market value, or income derived from grants or compensation schemes.
Most farm balance sheets pose a huge headache and in totting up the assets, it may also be appropriate to make adjustments depending on the time of year to include harvest values, projected yields, or underlying trends in crop prices.
The potential development value of a farm or estate is equally important and is of increasing importance to the courts. It is quite possible that a value pinned on a speculative, long-term development on the farm may be assessed, regardless of how remote the prospect may appear at the time.
Few farmers' wives would pursue divorce lightly and for many it is a last resort. But there are ways to avoid serious disputes.
Counselling or mediation is one route to overcoming marital rifts and financial disputes among farming couples. They also have a host of options and if there is a will and determination on both sides, an informal and equitable resolution can often be found that avoids costly court time.
If a farming marriage is beyond being saved, then couples will be obliged to engage the services of a specialist divorce lawyer, who will try to ensure both parties reach an amicable arrangement, rather than encouraging them to fight tooth and claw for their rights in the courts.
Round table negotiations work well in dealing with resolving financial claims and children issues, while collaborative law, when both parties agree to try to reach a settlement without going to court, can often very effective for resolving family matters. This route hinges on openness and honesty, but it is particularly effective in producing quick, personally-tailored and, generally, cost-effective agreements. The key incentive is to achieve a solution without having one imposed by the court.
Unreasonable behaviour is cited as the cause of the irretrievable breakdown in around forty-five per cent of divorces. Although not officially recorded, it is likely that this trend is equally common among separating farming couples. In the painful aftermath of any marriage breakdown, it is often assumed that the court will punish a spouse for past behaviour when deciding how to split the finances.
But, when it comes to splitting the money, the court's attitude is focused on the future. The court looks at what each person needs for their future lives and the contributions each has made or is likely to make to the family in the future. Many may behave irrationally when their marriages are breaking down, but only a minority behave in such a way that their conduct will be taken into account in making the financial order.
Most couples are able to agree how their finances should be split, with each having the help of a solicitor to advise on what might be a fair division. The starting point is always a full and honest disclosure of each person's personal assets.
The court will only consider complaints about the other spouse's behaviour if it is excessive and goes substantially beyond the limits of acceptable marital conduct. The conduct has to be such that it would, in the opinion of the court, be unfair to disregard.
If, on reviewing conduct, the court thinks that it is relevant to the adjustment of the family finances, it may then reduce the entitlement of one party whose conduct is in issue in order to reflect its seriousness in the context of the marriage.
Because of this, grave financial recklessness after the separation may well amount to relevant conduct and reduce the claim and entitlement of the reckless spouse to financial provision, as may a finding by the court that one party has embarked on a deliberate course of conduct to defeat or diminish the claims of the other. On the other hand, adultery and violence during the marriage are not likely to be relevant, unless in the case of violence it was extreme and can be shown to have had a lasting emotional effect.
Every married couple's circumstances are different and require a solution to suit their own needs and resources. The Court of Appeal holds that judges are not simply limited to granting awards based on need or to putting a wife "back on her feet". The court has clearly endorsed the nature of marriage and the value of commitment, with good conduct being part of a contribution to the marriage.
Of course, the best way to avoid potential pitfalls is to avoid getting divorced or nail down clear pre-nuptial agreements or contractual arrangements in the first place. It may be a case of easier said than done, but it may make for a happier marriage in the long run.
For more information on our divorce and family law services, contact Jane Cowley.
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