Going through a divorce with a family farm can be difficult

On Behalf of Griswold LaSalle Cobb Dowd & Gin LLP

A Central Valley resident who is going through a divorce or legal separation probably realizes that the process can be long, stressful and expensive.

Issues like property division and child support and custody, as well as other issues, can be contentious. If a person does not stand up for his or her rights, it could lead to a financial setback that lasts for years.

For farmers, divorce or separation

For family farmers and ranchers, divorce can make it difficult to continue operating a farm or pass it along to the farmer’s children or other successors.

Depending on the circumstances, a person’s spouse may have the right to claim half the value of the farm under California’s community property laws. Especially if a couple has been married for decades, the prospect of a farmer’s having to make a substantial payout is high.

Divorces involving a farm of any size are to some extent going to be complicated both legally and financially.

After all, the parties will have to agree, or the court may have to determine, the value of the farming operation.

Moreover, there may be other assets tied to the farming operation, like IRAs or other accounts and investments.

Finally, farms, and the spouses, may earn income from a variety of sources. Farming profits may have to be averaged out, and the farm may also earn income off of rent or other investments.

In the course of sorting this out, it may be difficult for the farming operation to take advantage of important business opportunities due to courts orders issued in connection with the divorce.

The reason calculating income and potential income is important is that it makes a difference when a court determines child support and alimony.

Family farmers need to understand their legal options

However, complexity does not mean that the divorce will also be the death knell for the farming operation.

For instance, some compromise short of a large cash buyout may be possible if the couple agrees that they want to be sure that their children are able to continue the farming operation.

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