Many of you will be avid viewers of the hit TV series Our Yorkshire Farm and be fans of Amanda and Clive Owen. Early disclaimer: I had not heard of this married farming couple until this week, when I read that they have decided to separate. It got me thinking about my own farming divorce cases, the steps we took in those cases and the steps Amanda and Clive are likely to go through next.
There is a good chance divorce will follow for Amanda and Clive and this blog explores some of the steps a farming couple will go through as part of their farming divorce.
Divorce laws changed in April this year and it is now possible to divorce without blaming the other person. If the rumours and headlines are to be believed, Amanda has grown close to her cameraman and, before April, it may have been that Clive would have divorced Amanda citing this behaviour. The couple have nine children between them and assets to divide; like many divorcing couples, they have lots to discuss, consider and negotiate together as they disentangle their lives from one another.
The new law will avoid Clive committing Amanda’s alleged flirtation to writing within the divorce proceedings. For all couples, it is hoped this will help to reduce and keep in check any animosity between divorcing couples, and allow them to focus on the important and difficult decisions that have to be made following the end of their marriage.
For most couples the arrangements for the children are the priority but this blog focuses on the other major consideration: resolving the finances.
Step one – what is there?
As watchers of the Owen family will know, they farmed 2000 acres at Ravenseat Farm, albeit this is a farm they did not own. In more recent years, they have earned income through their television deals and Amanda has published various books, also generating income for the family.
Whilst most farmers do not branch out into television and media, many farmers have been required to diversify, adding a layer of complexity to what are normally already complicated and messy financial arrangements, often including family trusts, complicated business structures, little to no readily available money and debt.
Why does this make things hard? It is because the first step is to work out what assets there are, something which can be easier said than done. It is not unusual to find there is a lack of paperwork on hand to support and piece together what has happened over the years. Do not therefore be surprised if you are also asked to prepare, with the assistance of your solicitor, a family tree and a timeline of important farming events.
Step two – what kind of assets are they and why is that important?
Once the assets have been identified, you are going to hear the phrases ‘matrimonial’ and ‘non-matrimonial’ assets. In simple terms, the former are assets that have been generated by the marriage, and the latter are assets external to the marriage, such as gifts, inheritance and assets that existed before the marriage.
The distinction is important because, in certain circumstances, it is recognised that a person should keep their non-matrimonial assets, i.e. the assets they have brought to the marriage; unlike matrimonial assets, the starting point is not that they should be shared or divided equally.
Very often a farm has been in a person’s family for many years, passing down the generations. More than somebody’s livelihood, it is that person’s home and their children’s future. It is therefore almost inconceivable to contemplate splitting it down the middle or, worse, selling it, which would end life as that person knows it.
The family courts are aware that, in farming cases, the farm is central to – more often than not but not always – a husband’s way of life. But the family court still has an obligation to ensure a financial settlement that is fair for both spouses is reached, which brings us to step 3.
Step three – what does needs and fairness require?
Another phrase I can guarantee you are going to speak about with a solicitor is ‘needs’, which is another way of saying the amount of money required for a person to house themselves, and to fund their day to day living costs both now and in the future. Working out what this means in each case is an exercise in its own right and involves considering the costs of appropriate housing, and looking at the couple’s income and outgoings.
The principle of needs is really, really important. It ‘trumps all’ and it is one of the reasons why non-matrimonial assets cannot always be retained by the recipient; sometimes an inherited farm has to be invaded if the other person’s needs require it. But that does not mean the other spouse is automatically entitled to 50% of the farm.
Step four – creative thinking!
Regardless of whether you are a husband wishing to remain at your family farm, keep the business intact and viable for you and your children, or you are a wife who needs to buy a new home away from the farm for herself and the children, it is unlikely that there is enough surplus cash to finance a suitable new home. This means you are both going to have to work hard to come up with a solution.
Creative thinking with the assistance of lawyers, land agents and accountants will almost certainly be required. Is there an opportunity for development or sale of a parcel of land that will not impact the day to day running of the farm? Is there an opportunity to diversify? Could your spouse move to an outlying cottage or residential building? These are the sorts of questions and considerations that will need to be explored alongside appropriate professionals, who will do their best to guide, advise and assist you.
How to work through these steps?
Whilst farming divorce cases have their own unique features, the same ways to reach a solution that works for both of you exist for farming couples. There are various ways and options available and it is not always best, particularly with farming cases, to head straight to the family court. Details of the various options available can be found under the “Finding a solution that works for you” section of our “Family Law” page on our website and should be discussed with legal advisors.
It may not be an easy journey but having the right professional people around you will assist you on that journey. Although not always the case, the value of working together (often with your wider farming family) should also not be underestimated.
If you would like to discuss anything todo with a farming divorce please contact a member of our Family team.