Divorce is difficult for any family, but when it involves a farming family, the impact can be particularly profound. The very structure and legacy of a multi-generational farm may be at risk, with the worst-case scenario involving the breakup and sale of farm assets – an outcome that rarely benefits anyone. Laura Martin, Partner and Head of Family Law, explains the key issues that can arise and how careful legal planning can help protect the farm for future generations.
Why Divorce In Farming Families Is Uniquely Complex
What makes farming divorces distinct is the deeply interwoven nature of family life and business operations. Farms are often multi-generational, with parents, siblings and children all involved. Ownership may be spread across family members or held in trust, making the division of assets highly complex.
Although inherited farms are typically considered “non-matrimonial” assets, meaning there is an expectation they will remain within the family, the distinction can become blurred when both spouses live and work on the farm and are actively involved in its operations.
Farming businesses often evolve over time, diversifying income streams and creating intricate ownership structures involving share farming, contract farming and various tenancy arrangements - such as Farm Business Tenancy (FBTs) and Agricultural Holdings Act (AHAs) tenancies. These factors can significantly affect land values and complicate the division of property during divorce.
How The Court Approaches Farm Divorce Cases
One of the first questions the Court considers is whether enough capital can be raised to meet the housing needs of both spouses, particularly the non-farming spouse, without destroying the viability of the farm. Sometimes, this may involve debt or the sale of parts of the land, which can undermine the business’s core operations. Courts are generally cautious when third-party interests, like those of siblings or parents, are at stake.
In the case of R v R [2002], Justice Wilson famously remarked on the difficulty of farming divorce cases, noting that it is often easier to critique proposed solutions than to devise workable ones. These cases demand careful balancing between the needs of separating spouses and the survival of the farming business.
Farm income is another factor, as it often does not reflect the standard of living it supports. When that income is split, the receiving spouse may experience a significant drop in living standards.
What Factors Influence the Division of Farming Assets?
When dividing assets in a farming divorce, the Court considers several key factors:
- Origin of the Farm: If inherited and intended for future generations, Courts are less inclined to order its sale.
- Ownership Structure: Shared ownership with other family members or involvement of AHA tenancies with succession rights will make the Courts tread carefully.
- Trusts and Estate Planning: If land is held in trust for the benefit of future generations, this will weigh heavily in the Court’s decision.
- Length of Marriage: Shorter marriages may make a sale less likely.
- Asset Management During Marriage: Pooling or merging assets may support arguments for sharing.
- Existing Prenuptial/Postnuptial Agreements: These agreements carry weight if properly executed.
- Liquid Assets: Courts may look to liquidate non-core assets first to meet needs.
- Expert Valuation: Early involvement of experts to value land, assets, income and tenancies is essential, as is consideration of tax, planning potential and third-party interests.
Case Study: P v P [2006] and the Future of Family Farming
This case involved a long marriage, two children with special needs, and a farm inherited by the husband. The total assets were valued at £2.5 million, the bulk of which came from the husband’s family farm. Although the wife had limited assets of her own, she was awarded 25% of the total estate, reflecting her reasonable needs and contributions.
Mr Justice Munby described the matter as “excruciatingly difficult,” emphasising the need to balance fairness with preserving the farm’s generational value that guided the Court’s decision. Notably, the wife's needs, as stated in her Financial Statement, were accepted without reinterpretation, underscoring the importance of accurate and thorough documentation.
Succession Planning to Protect Farm Assets from Divorce
To preserve the integrity of farming businesses across generations, many families use discretionary trusts, whether through Wills or lifetime settlements, as a way to limit exposure to inheritance tax and avoid asset fragmentation.
The proposed changes to inheritance tax (IHT) rules will have a significant impact on succession planning for farming families. Among the key reforms are restrictions on Agricultural Property Relief (APR) and Business Property Relief (BPR), which are vital tools in passing on farms tax-efficiently. These changes could significantly narrow the availability of tax relief, increasing IHT exposure when farm assets are passed to the next generation. This evolving landscape requires farming families to take a proactive approach to succession planning, ensuring that Wills, trusts, partnership agreements and business structures are reviewed regularly to maintain eligibility for reliefs. Failure to do so could reduce the assets available to the next generation and complicate financial arrangements in the event of divorce or death.
Prenuptial and Postnuptial Agreements in Farming Families
Even with succession planning, there is a risk: if farm assets are passed down to children who later divorce, those assets could become subject to division unless protected by Prenuptial or Postnuptial agreements. Courts are increasingly upholding such Agreements if they are made voluntarily, with the benefit of legal advice and full financial disclosure, and are considered fair. It is therefore vital to consider Prenuptial or Postnuptial Agreements as part of any succession planning.
Partnership agreements can also provide clarity. These should be carefully aligned with the partners’ Wills, as Courts cannot vary partnership agreements but will consider them in divorce proceedings. Failure to coordinate these documents can lead to disputes and unintended consequences.
How We Can Help
Farming divorces are among the most complex types in Family Law. They require a deep understanding and unique considerations such as generational ownership, third-party interests and business continuity. Protecting the farm requires strategic planning, including Prenuptial or Postnuptial agreements, trusts, partnership coordination, and expert legal and financial advice.
At Blanchards Bailey, we understand the multifaceted nature of agricultural law. Our specialist solicitors provide strategic and collaborative advice to provide tailored solutions that protect your family, your farm and your legacy. Should you need any legal assistance in this area, please contact Laura Martin on 01258 488216 or email laura.martin@blanchardsbailey.co.uk
You can also visit our family law clinics in Dorchester and Weymouth throughout the summer 2025 for complimentary initial consultations. Check the clinic dates here and book a session with us.
Please also visit our Agricultural Family Law webpage for more information.