New York farm owners considering a divorce might have a lot more to figure out than the average couple. Family farms are usually passed down for generations, but that doesn’t stop these properties from getting tied up in divorce.
Family farms are usually a combination of assets: a small business, a home and much more. In addition, assets can include everything from the animals to the vehicles on the property.
How do you protect the family farm in a divorce?
There are several ways that you can protect your family farm in a divorce. This can include prenuptial agreements as well as a combination of methods, such as trusts and life estates, to ensure that some parts of the farm are protected.
However, if you and your soon-to-be ex-spouse started the farm together, then it would be the same as trying to split any other small business up between a couple. Your partner would be owed their fair share of the income from the farm.
What are the challenges of a divorce between farmers?
Divorce when there’s a family farm involved can look more complicated. First, there’s the challenge of establishing income for both parties as individuals. This can be hard because the income may not match the actual value of the farm or the assets on it. Buying out your partner can be expensive, almost like buying the land over again.
If you have children you’re intending to pass the farm down to, you and your spouse need to also figure out how those assets will be passed down. You also need to handle any retirement accounts or savings accounts that were in yours and your spouse’s name.
Ultimately, the goal for both parties should be fair compensation without sacrificing the farm. This can be done in several ways, depending on many factors and unknown questions that you couldn’t possibly know until the divorce is in motion.
It’s important to communicate your wants and needs during this time in order to reach a solution that benefits everyone. Be prepared to spend some time just working with your spouse on what they want and how to accomplish it.