Devastating consequences of Dorset farm divorces

2019-08-07T12:12:54+00:00July 16th, 2019|

Divorce can have a devastating impact on the viability of Dorset farms, a legal specialist has warned.

Laura Martin, Head of Family Law at award-winning Dorset law firm Blanchards Bailey LLP warns that farming divorces can be challenging and complex.

She said: “A marriage break up in any family is upsetting, but when there is divorce in a farming family the consequences can often be far reaching – the worst case scenario being the dividing up of the farm, which tends to benefit no one.”

According to the Office of National Statistics, an estimated 42 per cent of marriages in England and Wales end in divorce. Latest figures, for 2017, show there were 101,669 divorces amongst opposite sex couples.

Laura, recommended by the UK’s influential leading law sector directory The Legal 500, added: “The strain on farm marriages is often exacerbated by long hours, physical exhaustion, social isolation, financial worries, red tape, stress and depression.

“Farming business may have been in a family for generations, with fathers, brothers, sons and mothers and daughters all being involved in the farming enterprise.

“This complex ownership, often involving family trusts, along with diversification to create new income streams, means that dividing up assets on divorce can be extremely challenging.”

Laura, based at Blanchards Bailey’s head office in Blandford, said farms can often be considered ‘non-matrimonial assets’ because they may have been handed down through the generations and there is an intention to continue to hand to future generations, but with farm home and work so interrelated and spouses usually involved in the farming business that distinction was blurred.

“The court has the difficult task of balancing the prospect of separating one household into two to satisfy the changing needs of the family and any children as against preserving the substance of the family business. Farming divorces need special care and an experienced legal advisor is essential.”

Laura said the court’s first and overarching approach to farm divorces was to ensure the needs of husband, wife and children were met. There was a general reluctance against selling off part of the farm to achieve it to avoid damaging the core activity, but it could be ordered.

“If the farm is owned through the wider family, with siblings and/or parents, then this will need very careful thought. Courts are reluctant to damage the livelihoods of other third parties.”

Laura said there were seven key areas which could affect final divorce settlements.

  • Where a farm has been handed down through generations and it is to be preserved for future generations then the court may be reluctant to order a sale.
  • Who else owns a share? Parents, siblings or others may have a vested interest in the business. Agricultural Holdings Act tenancies, particularly ones with security of tenure, complicate matters. The court will try and avoid any action that impacts on third parties.
  • Are there any trusts involved? Is the farm held in trust for one of a number of beneficiaries or for future generations? If so, this is a crucial factor.
  • How long is the marriage? Shorter marriages would tend to indicate no sale but are still dependant on particular circumstances.
  • How were the assets treated during the marriage? Pooling or merging assets tends to lean towards sharing of assets.
  • Were any agreements entered into prior to or during the marriage?
  • Are there any liquid assets in the farm? Could a spouse’s need be met by a sale of part of the farm that would not harm core activity?

A further factor to be considered with regard to protecting farms was the ramifications of next generation divorce if property and assets had already been transferred to the subsequent farming generation to minimise exposure to inheritance tax on death.

Laura also said prenuptial agreements, that provide clear evidence of what the couple intend to happen to the farm on divorce – were highly regarded by the courts, along with postnuptial agreements for those already married.

She added: “The bottom line is that farm divorce cases can be notoriously difficult to resolve by the judiciary and there is no substitute for expert advice.”

Earlier this year Laura became a Law Society Accredited Family Mediator, qualifying her as one of the most outstanding mediators in the country and part of a small group of lawyers who must be consulted before any family proceedings go to Court.

Laura is also a member of Resolution, the national organisation of 6,500 family lawyers and professionals committed to a non-confrontational approach to divorce, which has campaigned for 30 years for 50-year old laws to be updated to introduce ‘no fault divorces’

Eighty-strong Blanchards Bailey is a Legal 500 firm – making it one of the top firms in the South West – and is based in Blandford with offices in Poundbury, Shaftesbury and Weymouth.

The firm received unprecedented recognition in UK’s leading law sector directory, the Legal 500. The annual publication, The Legal 500 2018/19, recommends the firm in a record seven specialist categories with 11 individual lawyers mentioned including all five Partners.

Blanchards Bailey also won a hat-trick of titles at the 2019 Dorset Legal Awards: Law Firm of the Year (up to 99 employees), Company Commercial Team of the Year and Private Client Team of the Year.

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