Divorce and the Family Farm

family at a ranchFarming forms the important backbone of American agriculture and its food supply. As of 2016, there were 2.1 million farms in the United States, with 97 percent of those farms being family-owned. Working on a family farm to support your lifestyle and your family can be a rewarding task and can bring your family together.  Unfortunately, even small family farmers are not immune from family stressors and divorce is often a reality. Small family farms can present unique challenges in divorce cases.

First, a family farm is more than just a parcel of land. Often the family residence is on the same plot of land of at least part of the farm. In addition, farms may include livestock, heavy equipment, and many improvements on the land, like irrigation systems or barns. Farms also often have stores of crops to be sold, feed for livestock, or seed to plant for the next crop year. Family farms also may have contracts with the United States government to sell to the government at a certain price for coming years. In short, a farm is a large amalgam of assets, not just one house. To actually determine the value of the farm, it is likely that the parties will need to hire a financial expert. An expert can take stock of the assets, debts, accounts receivable, crop stores, etc. belonging to the farm and determine a fair and accurate value of the entire farm.

Next, the parties need to determine if one of the spouses is going to retain the farm or if the farm is to be sold. If the farm is to be retained by just one of the spouses, then he or she will likely have to “buy out” the other spouse. For example, if the net worth of the farm is determined to be $500,000, each spouse would likely receive $250,000 if the farm were sold. If one spouse is going to keep the farm, he or she will need to find a way to pay the other spouse his or her portion of the farm, which in this example is $250,000.

Finally, many family farms have been passed down over generations. If one spouse simply married into the family business and started helping out around the farm, he or she is likely not entitled to a half of the entire value of the farm at all. A skilled attorney can assist in determining whether part, all, or none of the farm is now marital property that should be divided in the divorce.

If you are a farmer and have questions about divorce and property division, you need the help of a skilled attorney. Call us today at (651) 371-9117 for an appointment.