It’s no secret that nearly 50% of all marriages end in divorce. Every day, people from all walks of life face the decision of whether or not to divorce their spouse. Going through the process is difficult for anyone, but for a farmer, the process can be quite complicated.
Given that farms are almost always passed down from generation to generation within families, farmers want to do everything they can to protect their farms when they are faced with the prospect of divorce. However, the farm may be considered a marital asset and could very well be subject to division between spouses if prior arrangements are not made.
Protecting your farm in case of divorce
There are several ways to protect your farm from being sold off and divided between you and your spouse in a divorce. These include:
- Signing a pre-nuptial agreement. This is perhaps the easiest way to preserve the farm in the event of a divorce. The pre-nuptial agreement should list the farm as a pre-marital asset that is only to be passed down from one blood relative to another blood relative.
- Setting up a discretionary trust. A discretionary trust is controlled by the trustee. This means that the family members who are the beneficiaries of the trust cannot access the funds, nor can they claim the funds as a part of their estates.
- Establish a partnership agreement. This would ensure that the division of assets is clearly established in writing, as well as stating exactly which assets are owned by each individual partner.
Farms are labors of love, hard work, and commitment that pass from generation to generation. Losing your farm in a divorce is preventable with the help of an experienced legal guide.