This week ‘Clarkson’s Farm’ was renewed on Amazon Prime, promising more insights into the day-to-day life of running a farm. Clarkson had no farming experience when filming started for Clarkson’s Farm. The programme follows him running a large arable farm, raising sheep and opening a farm shop.
The struggles farmers face
I had some idea before watching of the struggles farmers face from friends involved with the farming community, but nonetheless found watching clarkson’s farm a valuable reminder of how hard our nations farmers have to work just to keep things running smoothly.
The series showed the efforts of all those working on the farm, including Clarkson’s partner Lisa, and it is by no means uncommon for farmers’ spouses or partners to help out as either a full-time endeavour, or alongside a full-time job.
So what happens when a farming family breaks down?
As a result, where a farming marriage breaks down and it comes to dividing assets, it is necessary for the spouses’ contributions be recognised in financial terms.
Having previously worked for a firm specialising in high-net-worth assets, I know all too well that farms often have a ‘headline value’ of several millions, but it is rarely preferable, practical, or even possible to realise these funds without liquidating the assets. Equally, keeping the farm intact can lead to issues for the departing spouse, as their ‘share’ remains tied up and may never be released if the farm passes on through inheritance.
How could this be addressed.
So, what can be done to address this practically? Of course, every case is different and careful consideration needs to be given to what is best for each individual and what compromises can be made, but some potential options to consider might include:
1. Selling off parcels of land or mortgaging the farm to allow a lump sum to be raised. This needs to be carefully planned, considering:
a. Tax implications;
b. Affordability of mortgage payments;
c. Ensuring as little disruption as possible to rights or way or other easements; and
d. Limiting any impact on the ongoing viability of the farm itself.
2. Depending on profitability, arranging for the departing spouse to receive funds from the farm over time either from profits, future sale of assets, or a shareholding if the farm is run as a limited company. This ensures the farm is preserved as a ‘legacy asset’ to be passed down to the next generation.
3. Transferring smaller properties to the departing spouse if there are any unused buildings on site (for example, barn conversions or rental properties intended for farmworkers). These can be utilised for the spouse either to live in, or to rent out to generate an income.
These are just a few options, and the right solicitor will be able to discuss in detail the options available in each individual case. This is usually with the assistance of professional valuers who can assess the true value of the farm assets. They will asses where there is scope to release funds and the lowest impact way to do so. It is therefore essential to take legal advice at an early stage if you are concerned about how a divorce may impact on your assets, as investing in advice at an early stage can ensure matters resolve as smoothly as possible.
At an earlier stage, solicitors can also assist with relationship planning if you (or your children) are planning to marry and want to put something in place to protect the farm assets pre-emptively.
Jacksons are happy to assist with this. We offer a free 30-minute initial consultation to discuss matters on a no-obligation basis. Our solicitors Heather Snowdon, Emma Canham and Beth Courtney-Walker all have experience in dealing with farm assets in the North-East. Jacksons are proud to be on the National Farmers Union (NFU) Legal Panel for the North East of England and offer discounted fees to NFU members.