When you own a family farm and plan to end your marriage, divorce often becomes complicated. Will you keep the business and do you have to continue to work together?
Review these and other considerations for divorcing farm owners in Illinois.
Illinois requires the equitable division of marital assets and debts, which includes everything either spouse earned and acquired during the marriage. Under the equitable standard, your property division must be fair but does not require a 50-50 split depending on the circumstances.
If one of you brought the farm into the marriage, the court will abide by the terms of a valid prenuptial agreement if you have one. If not, the spouse who married into the farm may have a claim to its increase in value over the years of marriage.
Speaking of value, the process of appraising a farm and its varied assets can be complex. Many farms encompass not only the business operations but also the land, livestock, crops, equipment, buildings, and other types of property. If you may separate from your spouse and own a farm together, consider seeking a professional valuation of all assets sooner rather than later.
Operation and succession
Some spouses continue to work together in a shared business after a divorce. In this case, consider having a mediator draft an agreement about responsibilities and compensation to prevent future disputes.
If one spouse wants to leave the business, it can take time to replace that person’s knowledge and skills. Creating a succession plan that covers this issue can streamline this process.
Consider these factors as you enter divorce proceedings as a family farm owner.