Author: Stephen Williams

Issue: April 09

Publication: Suffolk Business

DIVORCE not only marks the end of a once intimate relationship but it also heralds a practical change in parenting arrangements. Sensible couples will wish to consider how two households can be secured and funded out of their joint assets.

Marital breakdown within the farming community highlights issues relating to the financial settlement, often because all or most of the assets are tied up in farming activity and the land. Regularly there is little by way of liquid assets to divide between the husband and wife, and the land that the family has farmed is seen as being necessary to ensure the ongoing profitability for the farm and, in one way or another, the on-going financial security of the parties and their children.

Moreover when farming couples separate an issue often arises because the assets originated from one side of the family and there is understandably a strong desire to try and ensure that the farm is preserved intact for future generations.

On top of this, the business of farming generates complex legal issues often including trusts, companies and partnerships that have been created as a commercial necessity but almost certainly not put in place with relationship breakdown in mind.

Understanding these complex arrangements and their consequences, as well as providing for the welfare of any child, can be a difficult task. Added to this, the Courts will have to consider the statutory considerations laid down in Section 25 (2) of the Matrimonial Causes Act 1973.

In the leading Case of P v P 2004, the Court was faced with the breakdown of a farming marriage of some 19 years. The couple had two children and the farm had been in the husband’s family for generations. The wife wanted the Court to award her a set percentage of all the assets available, however the husband argued against this approach and asked the Court to simply limit the wife’s claim to be met from the extent of his liquid capital.

The Court was not persuaded by either argument and asked the wife to outline her future needs. Clearly she required a house, so the Court ordered the husband to pay the wife a lump sum for the purchase of a property, along with a further lump sum to cover future capitalised maintenance payments. The total lump sum paid to the wife, when added to her own assets, represented 25% of the overall joint assets. The couple also agreed a figure for child maintenance and school fees.

In coming to its decision, the Court acknowledged that the farm had been in the husband’s family for generations and upon marriage there was an expectation that it would be retained intact. The Court was also clear that the wife’s settlement would meet her reasonable needs. In effect, the Court was able to impose a fair settlement on both parties even though the financial division was unequal.

The approach taken in this case could apply to many farming divorces, and the way in which the Court decided how the assets should be split is worth considering by farming couples planning on taking this step.

Stephen Williams

Partner & Head of Family Law Department

Tel: 01473 232425

Email: stephen.williams@ashtonkcj.co.uk

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