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Who Gets the Farm? (Part 1)

For rural families the farm is often the focal point of life. It is a place where families gather together and the lines between life and work not only blur but were arguably never there in the first place.

Whether it’s been in the family for generations, built up in one life time or acquired since the children were born, the future of a farming enterprise or partnership when a new relationship begins or a relationship comes to an end can present one of the biggest challenges. In particular whether the farm as a whole can be retained by one party or whether some of it may need to be sold or divided can have a profound impact both financially and emotionally.

While there are previously decided cases which help inform the Court and lawyers about the precise legal principles to be applied, when it comes to a farm it normally comes down to the individual facts and circumstances of each case and what is fair having regard to the contributions and future needs of the adults and children involved.

In the first instance we, as family lawyers, need to know as much about “the farm” as possible. As a starting point we ask a lot of questions to understand the unique facts and circumstances of each matter.

  1. What is it? Is it in one location on one block or is it spread across many properties in different local areas or in multiple locations in different states? Is the Plant and Equipment and machinery owned outright or is it leased? Is there a Water Allocation and what are its limits?
  2. What does it do? Is it a grazing property with cattle? Are there small crops for the local market or thousands of hectares with cattle awaiting export? Is it a feed lot? Cattle Stud? A vineyard? Orchard? Aquaculture or something else entirely?
  3. Who owns what? Is it held by one person, as a partnership, company or Trust? Is it owned and worked by the same couple that have separated? Is it owned by the previous generation and worked by one or more of their adult children with the expectation it will one day be theirs? Is it owned in one spouse’s name but the other person has spent their life time working it?
  4. Where did it come from? Was it acquired and built up by the efforts of past generations and passed on via a will or testamentary trust? Is it part of a succession plan where it is being paid off to a parent or grandparent during their lifetime? Has it been acquired as part of a single generation’s efforts or a matter of years?
  5. Who else is involved? Are cattle on agistment by others? Is there an LNG gas well with a right of access? Are there tenants renting one of the out buildings? What does the bank have security over? Is there an exclusive supply contract?
  6. What is your optimal outcome? Depending upon your involvement, the stage of your life and the state of your relationship, the outcome that you are looking to achieve can be one of the most important considerations. For example, if you are in partnership with an adult child that is about to enter into a new and untested relationship, there are steps that can be taken to protect the partnership from being drawn into a property settlement if that relationship fails. If you are in an existing relationship that has ended, it may be that your highest priority is to ensure that there is proper recognition of the work of previous family members and the contributions they have made to the current wealth. If you have worked alongside a spouse on the farm for many years and raised a family together but your name has never been legally included on the paper work it may be that your highest priority is securing your own financial security.

Once we have an understanding of what the farm is and your optimal outcome we work with those involved, including accountants, valuers and other experts to consider the range of options which will best meet that outcome.

The short answer to the question of who gets the farm as part of a family law property settlement is that there truly is no short answer. What is clear however is that no matter what your involvement in the farm has been to date or its value, the farm is more than just another asset to be moved around on a balance sheet. It is important and we take the time to work through each of the issues carefully because we understand that it can and does make a big difference to your future financial security and indeed your whole way of life.

Read Part 2 Here