Contributed by Lovewell Blake
1/11/2018 - Lovewell Blake
Lovewell Blake is delighted to invite you to join them for an upcoming farmers evening, held jointly with Durrants, Barclays and Greene & Greene.
This event will look at how to secure a farming business for future generations. The agricultural specialists from all four firms will talk you through a number of options which will be relevant to many farming businesses.
The evening starts at 7.15pm for a 7.30pm start, the talks will be followed by a buffet and the chance for further discussion.
Halesworth Golf Club, Bramfield Road, Halesworth, IP19 9XA
Book your place by calling 01986 873163 or emailing Tracy Cox.
Below; Ryan Lincoln, Agriculture Partner at Lovewell Blake looks at why Family Farm businesses are forced to take a rather unromantic stance when it comes to safeguarding their futures.
A family wedding is a cause for celebration, and everyone wants to believe that every couple tying the knot will be together until death do they part. But the reality is that around 1 in 2 marriages ends in divorce, and the stress-filled world of farming is not immune from that sober statistic.
Farming has a higher proportion of family businesses than most sectors.
Many agricultural businesses have been successfully handed down the generations over the years – but due to their unique reliance on land assets, avoiding fragmentation in the event of a relationship breakdown requires careful planning.
It may seem somewhat hardhearted to be planning for an outcome that no-one wants to think about when family members are planning the happiest days of their lives, but tackling that contingency – however remote you might hope it is – earlier rather than later can save a lot of hassle and heartache.
In the worst case scenario, a divorce court could allocate half the material assets of a farm – and in reality that means half the land – to a departing spouse. For many farms this would destroy the viability of the whole business, forcing sale and bringing to an end the family’s tenure for ever; very few farms can generate the cash to buy out a departing spouse’s share of the assets.
Historically, families might have used trusts as a mechanism to protect assets.
Trusts still have a significant role to play but increasingly need to be seen as part of a matrix of different solutions including partnership (or shareholder) agreements and nuptial agreements.
The concept of the nuptial agreement (whether prenuptial or post nuptial) is long-established across the Atlantic and is becoming increasingly common here in UK. Although strictly they are not binding in this country, judges must give them appropriate weight provided that they meet the relevant criteria so they are likely to be upheld provided that they are not unfair.
It is something that requires careful planning, but it is also something which many people shy away from talking about for fear of being seen as unromantic. But there is very little romance involved in selling up a farm which has been in the family for generations to settle a divorce – so farm families’ wedding planning definitely should include planning for the worst-case scenario.
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