Solicitor Deirdre Flynn tackles this delicate reader issue
Dear Deirdre, myself and my wife of 10 years spent the past five years building up the farm, when my parents signed it all over to me. It was a beef farm and we went into dairying and installed a milking parlour and invested a lot in it.
In fairness to her, it was the income from her job that allowed us to do this, as we had to finance about €400,000 of work between installing a new milking parlour, buying in stock, reseeding and drainage and we’re really only beginning to start to pay this off now.
My parents built a bungalow on the farm and live there and we live in the old farmhouse, which was built by my grandfather.
Now I’ve found out that she has cheated on me and it seems everyone in the parish knows about it. I’m a laughing stock locally. I knew we had some issues in the marriage but I didn’t realise how bad things were until one of my friends told me recently in the pub about the affair. He said the whole parish was talking about it and I should know.
I confronted my wife about it and she admitted it but said it’s over and won’t happen again, but I don’t believe her. The man she had the affair with is a work colleague of hers – they have a dental practise together in the next town. The business is in both their names since they set it up 15 years ago and her income from this is around €80,000 and this was used to finance the restructure of the farm.
I want to divorce her but I’m afraid I’ll lose part of the family farm. My parents would also be destroyed.
What do I stand to lose?
Marital breakdown is always difficult for a family and after the children, if any, the division of assets is a big concern. This is particularly so for farming families where a farm has been passed down for generations.
You say you want to divorce your wife and in order to do so in Ireland, three requirements must be met:
It appears from your letter that the breakdown of your marriage has just happened and so you will have to wait to get a Divorce but you could apply for a Judicial Separation (court ordered separation) which can also deal with the division of assets. Once the requisite time has passed, you could then apply for a Divorce on the same terms as the Judicial Separation.
In terms of the division of assets, there is a misconception in the public that a spouse is automatically entitled to half the farm in the event of marital breakdown.
This is not always the case. The outcome of a family law case varies depending on the particular circumstances of that case and yes, in some situations, the spouse does get half the farm but a number of factors are considered before that happens.
Courts are in fact reluctant to divide a family farm and/or order the sale of the farm or part thereof. This is so for a number of reasons, for example, a farm has traditionally been in a family for generations and has generally been inherited or gifted to a successor with the intention that it will eventually in turn be passed down to their successors.
Courts tend to treat inherited property differently to that property obtained by both spouses during their marriage. Furthermore, dividing a family farm can affect the viability of that farm and its ability to generate an income for the spouse and dependents.
This is a huge factor as to divide the farm could effectively deprive someone of their livelihood.
In your particular case, you received a gift of the farm from your parents five years ago and since then, your wife’s salary enabled you to develop the farm and you borrowed €400,000 on the strength of your wife’s income.
You and your wife are living in the farmhouse built on the farm by your grandfather. As you only got the farm five years ago, presumably your wife is not registered on the title of the farm and the house.
Your wife therefore will likely have what is called an equitable interest in the property. Your wife’s contribution, both directly and indirectly, to the farm and the house, will be taken into account by the Court in assessing the overall division of assets.
You may well have to provide her with a lump sum payment and/or seek her release from the borrowings of €400,000.
If you do have to pay your wife a lump sum, in order to determine where this money is going to come from, you will have to look at a number of options. Firstly, you will have to see if there is any equity left in the farm by getting an auctioneer’s valuation of the entire farm and see how much more you can borrow against it in your own name.
If you cannot borrow any more money, you will have to raise it in some way. Perhaps, depending on the amount that may have to be paid to your wife, you could pay same over a set number of years and the EU Entitlement lump sums, if you are getting them, could be used towards these payments. If that is not an option either, then you will have to look at selling something, be it shares if you have any, a site or some land.
If you have to sell land, then you will have to get an Agricultural Consultant on board to assess the viability of your farm without a parcel of land and to advise on what parcel would be most suitable for sale, i.e. what parcel of land is least necessary in terms of generating an income from the farm.
Although not part of your question, it is prudent to point out that your wife has a business which provides her with an annual income of €80,000 and it is worth noting that she is also financially exposed to you in any family law proceedings, particularly as her income is presumably higher than yours.
In any family law proceedings, both parties must make full financial disclosure so you will be aware of her financial position also.
It is an exceptionally difficult road and you should immediately consult with your solicitor to get specific preliminary advices.
It is important that you surround yourself with the appropriate professionals should you decide to formally separate and it would be better to negotiate a settlement outside of Court to keep costs down and to retain some level of control of how assets are divided.
Deirdre Flynn is from a farming background and practices as a Solicitor at Deirdre Flynn Solicitors, Cathedral View, Ardfert, Co. Kerry Tel: 066 7115695 Email: firstname.lastname@example.org
The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information provided, Deirdre Flynn does not accept responsibility for errors or omissions howsoever arising. You should seek legal advice in relation to your particular circumstances at the earliest possible time.