28 December 2001

DIVORCEAFTERWHITEv WHITE

WHEREAS the quest to find a perfect partner in The Farmer Wants a Wife may make good television, the potential impact of divorce on a family farming business has little entertainment value.

Unromantic it may be, but last years ground-breaking White v White divorce case – which resulted in part of a family farm being sold to pay off the divorcing wife – has prompted increasing numbers of farmers to seek discreetly the advice of their solicitor before tying the knot.

"We have had a number of calls this year from clients who, with their wedding day approaching, have been seeking advice on how they should structure their business interests," says Adrian Horwood-Smart, who heads the rural business team at Taylor Vinters solicitors in Cambridge.

"White v White has certainly prompted many farmers to think very carefully about this issue. Of course its disheartening to consider such things prior to your wedding day. But when a farm has been in your family for many generations, as is often the case, it is only natural to want to do everything you can to protect it.

"We work closely with our matrimonial team to provide pragmatic advice, but there are no magic solutions. As things stand, there is no absolute way to prevent family assets from being included in a divorce settlement. But there are steps that can be taken which could improve your chances."

Pre-nuptial agreements are not yet legally binding in the UK. However, they do provide valuable evidence of the couples agreed intentions at the outset, says Mr Horwood-Smart.

"Historically, couples in the UK have been put off these agreements by the procedures involved, which requires financial disclosure on both sides and each party being independently represented. However, in the light of White, some may now feel it is a nettle that just has to be grasped.

"Such agreements are common in the US and mainland Europe, where they are legally binding and there is a lot of lobbying to change the law in the UK. If that does happen, I am sure they will eventually become more common."

Another option is to put core assets into trust prior to the marriage. "A divorce court would ordinarily look to other liquid assets before involving the trustees."

However, when it comes to the crunch, Mr Horwood-Smart believes that most farmers will continue to take a calculated risk rather than take any action that might be misinterpreted.

Sadly though, statistics suggest that it is one major gamble that they may ultimately regret. &#42

White v White: One year on

The White v White case raised as many questions as it gave answers.

What it did do, however, is shift the benchmark by which the courts will consider "big money" divorce cases – farming or otherwise.

Awards to the non-earning spouse used to be made on the basis of their "reasonable requirements". But they must now be checked against the "yardstick of equality", though no reported case law has yet suggested that this has been interpreted as a 50:50 split.

The White case was also quite distinctive in its facts, in that Mrs White was herself a farmer, who had brought a considerable amount of land into the marriage. And she wanted to continue farming after the divorce.

To say every farming divorce case will have the same outcome would be scaremongering because the courts do still have the flexibility to look at all the facts of each case before making any order.

In particular they may depart from the principle of equality for the following reasons:

&#8226 If one party has made a unique and exceptional contribution to the marriage, which can include by way of inheritance.

&#8226 Where "needs" by either party justify a departure.

&#8226 Liquidity issues, though the fact that an award may affect the business liquidity will not automatically prevent it being made.