"The land, livestock, equipment, and operation itself may require a separate appraiser for both spouses, due to the fact that they all have independent value."
When one is experiencing the divorce process, there is a lot of attention placed on the assets of the individuals in the couple. Their house, their vehicles, their property, and many other entities are looked at under the microscope of the process. If you own a farm, the assets being looked at are weighed a little differently.
The state’s status as to whether it is an equitable distribution state or community property states. In community property states, all assets acquired during the marriage are considered “community property.” In equitable distribution states, property and debt obligations are distributed fairly during divorce proceedings. Community property divorce laws are less prevalent and are only found in Texas, Arizona, Louisiana, New Mexico, California, Washington, Wisconsin, and Idaho.
In cases involving farms and farming businesses, it can be tricky. Many farmers enter into marriages with valid prenuptial agreements, considering many men and women with significant assets like expensive equipment, substantial retirement savings, businesses, or property have a lot to lose in a divorce.
In the proceedings, property is put into question, as to what property is marital or shared and what property needs to be divided or kept intact. According to the University of Maryland’s Department of Agricultural Law, nonmarital property is defined as property when it was acquired before the marriage, when it was acquired either before or during the marriage by a gift or an inheritance, when it was excluded by a prenuptial agreement, or when it was directly traceable to any of the previously listed sources.
This differs in comparison to marital property, which is acquired by one or both parties during the marriage. Ownership interest in business entities are often valued and included under the marital property umbrella, making farms a complex entity. The land, livestock, equipment, and operation itself may require a separate appraiser for both spouses, due to the fact that they all have independent value. If the spouses cannot agree to a value to the property and its division, then the courts step in.
Because of the nature of marriage, nonmarital property can often turn into marital property during the course of the marriage, through sharing and working toward the same goal. In farming situations, the spouses could both work on and maintain the farm to their best ability, making it marital property, even if it was the nonmarital property of one of the spouses beforehand.
Root of the cause
Farming families experiencing a divorce is not a new trend, but it is a trend that has increased over the last 40 years, according to Dr. Mike Rosmann, a psychologist who published a report in Iowa Farmer Today. Many rural sociologists blame the economic crisis that took place during the 1980s. It affected farmers in the Midwest, causing many farmers to be close to losing or to actually lose their farms. The financial stress of nearly losing the farm caused an increase in spousal abuse, family fighting, and divorce in farming families.
Since then, relationship problems between family members have become more common than anxiety, depression, and substance abuse, according to the report. A report in Farm and Ranch Guide by clinical psychologist Val Farmer found that there were additional patterns that have led to divorce in farming families.
Many couples lack respect and acceptance in their relationships, where one spouse feels that the marriage should benefit the farm, and by extension, themselves. This leads to them not putting forth the effort in meeting their spouse or children’s needs and not viewing their spouse as a true partner, leading to entitled and imbalanced behavior.
Farmers can often become workaholics and neglect their families through diving into their work. This is often something that starts in childhood, especially if they grew up working on a farm. It also can be challenging when one spouses’ parents are the owners of the farm, creating a question of loyalty. In addition, having one’s business and home in the same location makes some spouses feel like they are always on duty and the work is never truly done.
While work can be used as a coping mechanism to avoid familial responsibilities and to blow off stress, alcoholism has the same destructive effect. The unreliability and irresponsibility of neglecting one’s family by focusing on work is the same as the unreliability and irresponsibility of spending all of one’s time in a bar or in a bottle. It can often alienate family members who view this behavior as a problem, causing rifts in the family dynamic.
If one spouse is not from a rural farming community and marries another spouse that is, the cultural divide can put stress on the relationship and create unrealistic demands to visit both sides of the family, in order to experience both ways of life.
Speaking of stress, debt and the stresses of financial worry can have a negative impact on one’s relationship with their spouse, allowing feelings of anger, exhaustion, and loneliness to surface. It also puts pressure on the nonfarming spouse, making it so their income keeps the opposite spouse’s farm afloat.
Understanding the situation
Many times when a farming couple divorces, the stability of the farm is called into question, and the notion of selling the farm is floated and considered. There also is legal precedent regarding third parties entering into the discussion, in order to buy farms being deliberated on by a divorced couple. This can often lead to appeals and hearings, which drag out aspects of the divorce even longer than previously anticipated.
Finding a lawyer that understands the farming community and the need to keep the business aspect of the farm afloat will be important for the spouse who primarily runs the farm. The lawyer and client need to be able to communicate and understand the terms and needs of this unique situation. Divorce happens no matter where you live or what occupation you might employ, but doing your homework and being prepared for the divorce experience and what it means for the asset of your farm is like preparing your farm for the harsh winter ahead.
Dan Pearce is an Online Editor for Lexicon, focusing on subjects related to the legal services of customers, Cordell & Cordell and Cordell Planning Partners. He has written countless pieces on MensDivorce.com, detailing the plight of men and fathers going through the divorce experience, as well as the issues seniors and their families experience throughout the estate planning journey on ElderCareLaw.com. Mr. Pearce has managed websites and helped create content, such as the Men’s Divorce Newsletter and the YouTube series, “Men’s Divorce Countdown.” He also has been a contributor on both the Men’s Divorce Podcast and ElderTalk with TuckerAllen.
Mr. Pearce assisted in fostering a Cordell Planning Partners practice area specific for Veterans, as they deal with the intricacies of their benefits while planning for the future. He also helped create the Cordell Planning Partners Resource Guide and the Cordell Planning Partners Guide to Alternative Residence Options, specific for seniors with questions regarding their needs and living arrangements.