Posted: 15/03/2024
The global trend for people steering away from marriage and choosing to live together is permeating even the most traditional corners of society. Our International Family Law Report: Cohabitation Conundrum highlighted the huge increase in cohabiting couples over the past decade and the family farm is no exception to this trend.
Farming life is most frequently a long established family affair but as Prime Minister Rishi Sunak highlighted in his address to the NFU Conference last month, farming is 'going through the biggest change in a generation' and approaches need to evolve accordingly.
The family farm encompasses many things: it is a complex business asset; a family home; a significant landowner and, most frequently, has been passed down through several generations.
Farming families will often have given significant thought to succession plans to ensure the survival of the family farm in an environment which is often seen to have become increasingly hostile to farming, whether that be through the loss of EU subsidies, the impact of climate change or the lure of the value of land being developed when contrasted against low profitability and productivity. In addition to these well known challenges, it is vital that farming families also consider how to protect themselves as a new generation begins committed relationships.
The average age of a farmer in the UK is over 60 years old and farmers or land managers run over 70% of the UK’s land. Most frequently, a farming family will have a clear succession plan which involves handing over the reins to adult children, often after decades of working side by side. Andrew Bird, an associate specialising in our private client team agricultural contentious trusts and probate says: “We frequently see disputes in farming families following a death but it is equally important to safeguard the farm in life.” If an adult child begins a committed relationship but chooses not to marry, it is key that careful advice is taken to secure the long term survival of the farm.
Whilst cohabiting couples do not benefit from the same financial remedies as married couples if their relationship breaks down, there are still far reaching claims that can be made. A separating partner could make a claim for a share of the farm under the Trusts of Land and Appointment of Trustees Act which could result in the sale of the farmhouse. If an unmarried farming couple have children, a claim could be made for financial provision for the children under Schedule 1 of the Children Act. Whilst in Schedule 1 cases, the farmhouse would revert to the farming family when the children have reached the age of 18 or left university, it may cause significant issues, whether that be financially or practically, for the farmhouse to be occupied by a former partner for, what could be, more than two decades.
The nature of agricultural wealth most frequently means that a farming business has significant assets but little liquidity. In the absence of access to cash, it becomes more likely that a court would seek to order a sale of the family home to meet any claim, whether that be to meet the needs of children or to fulfil a claim for the farm made under ToLATA.
As societal norms shift, and living together overtakes marriage in popularity, it is important that a fresh look is taken at the family’s approach to asset protection. It is not sufficient to take the view that because a couple are not married, there is no need to be concerned about asset protection. Cohabiting relationships can evolve almost by stealth; what can begin as someone coming to stay for a week or two can evolve into them giving up a tenancy or selling their own home and remaining there on a permanent basis.
It is therefore imperative that the basis of someone’s occupation of a farmhouse is set out in a clear, agreed document at an early stage. For farming families, that might go further than the terms of occupation of the farmhouse. It may extend to any pay which is to be received for working on the farm and, importantly, set out the intention in the event of a relationship breakdown.
Taking an early, collaborative approach is likely to result in an outcome which ensures the security of the family farm for future generations so that complex and costly court battles can be avoided and the family’s focus can remain on maintaining the success of a prosperous hereditary business.
It is important that a farming family has experienced and trusted advisors to navigate an evolving environment both for their business and for their family. Our experienced team of lawyers can provide decisive and clear guidance to protect the family estate.
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