Farming and Rural
Property settlements involving farming enterprises and rural properties can present complex and challenging issues for those involved. Such cases require specialised skills and experience in order to ensure a fair property settlement outcome. While the Court will give recognition to a spouse who contributes farm real estate holdings and farming businesses to a de facto relationship or marriage, these assets are not quarantined from a property settlement. Land and assets received by a spouse from his or her family by generational traditions can be divided and lost in a property settlement.
Placing land or farming enterprises in a company or trust structure is generally an ineffective method of protecting such assets from property division. The Court is prepared to determine assets of a trust, family company or other corporate entity to be the assets of one or both of the spouses where the degree of control of one or both of the spouses is so extensive, that in reality the assets of the entity are the assets of one or both of the spouses.
A Court considers the contributions of both the farmer and non-farmer spouse during a de facto relationship or marriage. The contributions of the non-farmer spouse can take the form of homemaker, parent, working on the farm and doing the books. The Court views these contributions just as importantly as the financial contributions of the farmer.
To provide better certainty in the event of separation, a Financial Agreement can be entered into between the farmer and non-farmer spouse either before or during a marriage or de facto relationship. A Financial Agreement can, in the event of separation, protect farming assets and in particular farming land from claim by the non-farmer spouse to ensure on-going financial viability of the farming business. For example, the terms of a Financial Agreement may provide that in the event of separation, the farmer spouse will purchase a property off the land for the non-farmer spouse to an agreed value with a cash sum; with the benefit to be financed by the farmer spouse over time. Without a financial agreement, the result could be a Court forcing the sale of land at not only the wrong time (in terms of income and debt levels) but adversely affect the commercial viability of the farming enterprise.