Because many marriages end in divorce, farming families must decide how the farm will be divided. If a family has been farming the same land for generations, it is smart to protect the assets involved from the property divisions that come with divorce. There are many assets involved in farming. In addition to the land itself, there is equipment and livestock to account for, as well as the possibility of rental income. In addition, the couple may have intended for the farm serve as a retirement income source.
One of the best ways to avoid the financial perils of divorce is to plan for it. It may be a somewhat uncomfortable discussion to have, but it can make things easier down the road if assets need to be divided. There are a few ways to protect your farm. The law provides several means to do this, including through estate planning, signing prenuptial agreements, or establishing farm assets as part of a trust or business entity separate from private matters.
A good way to ensure that the farm stays in the family is to put it in writing. Estate planning tools, such as wills, can keep the line of succession for farm ownership from transferring to the spouses of descendants if death or divorce occurs.
If there is no inheritance restrictions on the estate, one way to prevent marital property laws from affecting farm assets is to agree to a prenuptial arrangement that lays out the ownership of farm assets as non-marital property and is therefore not subject to division in the case of divorce. The agreement should lay out all assets of both parties with full disclosure of approximate values, lest the document be challenged by one party claiming to have been misled about asset values. Though less common, post-nuptial agreements can offer the same advantages.
Trusts and Other Vehicles
Another way to set up the farm to remain intact and in the family is to put all farm assets into a trust or other vehicle that transfers ownership from individuals into a separate entity protected by specific rules. Depending how the trust is set up, it may still benefit the family or support descendants, but the property does not change ownership. Similarly, if the farm is set up as a business, such as a limited liability company or corporation, it may gain certain protections against being divided up in a divorce.
Towson Divorce Lawyers at Huesman, Jones & Miles, LLC Help Protect Your Assets
If you are going through a divorce that is complicated by significant property and business assets, you should discuss your case with the Towson divorce lawyers at Huesman, Jones & Miles, LLC. We can help you protect your long-established family interests from the vulnerabilities of the divorce process. Contact us online or call 443-589-0150 to schedule a free consultation.
Located in Hunt Valley and Towson, Maryland, we serve clients throughout Baltimore, Baltimore County, Bel Air, Bentley Springs, Columbia, Freeland, Hereford, Hampton, Westminster, Essex, Monkton, Sparks Glencoe, Parkton, Phoenix, Pikesville, White Hall, Carroll County, Harford County, and Howard County.