Legal guidance from Family Mediation Reading’s Associate Solicitor Hannah Porter sheds light on the complexities of divorce in farming families.
Reading Family Mediation says that Emotionally intense divorce is, no matter how well-intentioned the parties are. As one of the most stressful life experiences, divorce is typically ranked among the top five. Many agricultural families are already under a lot of strain because of the complexities of their assets, which are made more difficult by Brexit. Even if this doesn’t happen, it might put at risk the amicable relationship between divorced spouses.
Financial claims in every divorce may include assets, capital, pensions, and claims against the business of either spouse. A farmer’s primary focus is the family farm, and the financial information he or she collects includes everything from farming and management records to revenue and expenditure information to even the land’s borders.
It’s not uncommon to find farms that are family-run, with generations of farming families. Co-farming, tenancy, trusts and inheritance are all examples of this. Additionally, there is the possibility that the couple and their children may not actually own the land on which they plan to build their new home. Their parents or in-laws may instead be the legal owners of the property. To ensure that the farm continues in the family, foresight agricultural families may have instituted succession planning. In addition to that, there is much more. A common complaint among farmers is that they have enough capital but not enough income. Divorce settlements may quickly spiral out of control from a simple beginning point. Here are some Brexit-related considerations to keep in mind.
Brexit has had an impact
As a result of Brexit, funding and aid for farmers will no longer be provided by the Common Agricultural Policy of the European Union, but rather by the Agriculture Act 2020. Seven years of transition before a scheme in which aid payments are tied to environmental goals and the support of stewardship programmes. An accurate assessment of assets is more difficult at this time because of the transition phase and the change in payment criteria.
Both parties in a non-farming divorce who own a business must reveal their ownership, and the company’s accountant or another expert will often provide an estimate of its value. Information about a company’s past performance is typically used to predict its future performance and consequently its value. “
In the case of a farm company, prior results may not be predictive of future results. When it comes to a farm that was previously supported by payments under the Common Agricultural Policy, it’s too early to say how the transfer to the new plan would affect the farm’s existing worth. When it’s clear that a farm’s income would drop significantly in the years to come, is it even possible to put a value on it?
In what ways may farmers expect an equal transfer of farm assets?
On the basis of the Family Mediation Reading Clearly, divorce in farming families isn’t always a straightforward process. It’s possible for an estate to be sold by the courts in order to provide a spouse with a financial windfall. Another possibility is that this transaction will have disastrous ramifications on the rest of the family or maybe the entire community. As may be expected, courts seldom consider the sale of a farm to be a perfect arrangement.
In its place, the court will assess if there are adequate grounds to weigh a distribution of assets in favour of the farmer in order to sustain the agricultural business. A skilled appraiser’s services are more important than ever in light of the uncertainties surrounding future payments following Brexit.
Retaining the method cordial
There are so many potential conflicts and the chance that the departing spouse won’t get their “fair share,” is it really possible to stay cordial? It’s in everyone’s best interest to keep things peaceful, especially if there are children involved, some of whom may want to carry on the family farm. In the end, it’s crucial to minimize the negative effects of divorce on children.
Keeping financial disputes out of court is possible if the separating couple can agree on a financial settlement with the help and advice of their attorneys and specialists. When it comes to keeping legal disputes out of the courtroom, it will also save money.
Conflict resolution alternatives like mediation and arbitration should be taken into account. For example, in Family Mediation Reading, a neutral third party will work with the couple to find a solution that is mutually acceptable. There are arbitrators who specialize in farm disputes who can deliver a decision and award for those who choose for arbitration.