As the words of the old song go, “Breaking up is hard to do”.
This can be even more so for farming families.
It is always in people’s own interest to use peaceful rather than high-conflict means to resolve relationship disputes — means such as mediation, counselling or collaborative law, unless there really is no alternative.
Litigation can be a very long, drawn out and costly process, and will not necessarily provide solutions that are best for the parties concerned, or the future of the farm.
When a couple’s marriage has irretrievably broken down, and they have exhausted counselling, mediation etc, they can agree the terms upon which they wish to live separately, and enter into a form of contract called a Separation Agreement.
Both parties must consent to the terms of separation.
It is advisable that both parties swear an Affidavit of Means setting out their income, assets etc, prior to entering into a Deed of Separation. It is a legally binding contract setting out the parties’ rights and obligations to the other.
It is essential that both parties receive independent legal advice.
Issues that can be included in a Deed of Separation are custody, access to the children, maintenance arrangements, division of property, Succession Act rights, the debts and liabilities of both parties, and taxation issues of both parties.
A separation cannot deal with matters arising as a result of a pension, and an application will have to be made to court for any Pension Adjustment Order.
Couples breaking up tend to link parenting of their children with the division of assets. Those two things should be kept separate, and not be used as a weapon. The sooner people start to separate those two things in their minds, the better.
In many cases, the biggest issue is payment of maintenance. Typically, this centres on ensuring that spouses have enough money to live on, and have a roof over their head.
Do not neglect your financial obligations. Ensure you honour your maintenance commitments.
Be realistic about how your financial situation is going to be resolved. You are trying to set up two houses, when you separate. Most of the time, there are children involved, and both parties’ standard of living is going to be diminished.
Where there is no agreement between spouses as to the details of a Separation Agreement, an Application can be made to the Court to decide what the terms should be. This is called a Decree of Judicial Separation.
A division of assets such as farmland, finances, maintenance, custody of children is covered in this, either by mutual agreement or according to the Court’s decision.
It is not the case that a family farm would automatically have to be sold, if the marriage breaks down. The situation and facts will be different in each case.
The contribution of each spouse will be taken into account, including the financial and personal contribution of each party within the marriage and family, particularly where there are children.
The length of the relationship and marriage is also given weight, together with the ongoing financial prospects and ability of each individual spouse.
The registered owner will generally retain ownership, unless the spouse can show that circumstances are such that the Court should make a Property Adjustment Order to divide the farm — for example, where one spouse must leave the family home, and there are insufficient funds for them to acquire another home without the sale of some of the farm property.
The Court may divide the property, or direct that part of the property must be sold.
Courts are generally reluctant to force a sale of the farm, unless there are no other assets, especially if the farm is viable.
Farmers always want to know how this works, but the reality is that there are no hard and fast rules.
The bottom line is that the Court has significant discretion as to how assets are dealt with on separation and divorce.
Where there are children involved, the Courts will at all times ensure that “the best interest” of the children is the basis for the decisions made.
It is always better to try to agree all or as many matters as possible between you and your spouse, especially when a family farm is involved, rather than leaving a judge decide.
At the end of the day, you know your farming business better than anyone.
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