DECEMBER 2, 2013
Features FARM MANAGEMENT
Five ways to navigate a divorce It’s not something anyone wants to think about, divorce can devastate a farm BY SHARON ELLIOTT
wning a farm operation and going through a divorce is, in one word, complicated. There are so many factors to consider and each situation is unique. Seeking legal counsel is vital. Consider these general tips from a legal perspective, along with thoughts from a fictional male farmer who has gone through a divorce.
1. CO-OPERATE AND COMMUNICATE In Canada, the main law governing divorce is the federal Divorce Act. This Act applies across Canada, but the processes for getting a divorce fall under provincial laws. The Divorce Act presumes that both partners have contributed to the family property in equal measure upon marriage (or after two years of co-habitation). Assets, then, are (generally) equally divisible. The challenge, from a legal perspective, is to accurately assess how much the farm operation is worth. You can assist by being honest and up front with your lawyer. Now is not the time to try and hide assets. That which might have been a write-off for tax purposes, may now need to be considered when calculating income for child and/or spousal support. At the same time, some aspects of the operation may be exempt. The goal is to come up with a fair picture of the farm operation’s assets and debts. If possible, work with your spouse to come to an agreement about the value of land, machinery, and equipment. Otherwise, your lawyer will continue to mine the information until they have an accurate a picture as possible of the operation. I never realized how complicated it was to define the family property or to calculate my income... her income was straight forward since she worked off the farm, but mine was complex. I thought I could keep some things hidden but the lawyer told me that would be a mistake. Sometimes I got so frustrated, saying “this isn’t fair!” but they said this wasn’t the time to voice whether the process was fair or not. Kept quoting the Divorce Act about equal division of the operation. Hard to take when I think of the farm being in the family for generations.
2. TREAT THE DIVORCE AS A BUSINESS TRANSACTION Farming is a business and needs to be treated as such through a divorce. Ideally, there was a discussion about the farm operation early in the relationship that asked, “What is the plan if this relationship doesn’t work out?” A pre-nuptial agreement or interspousal contract is helpful especially for those coming into an established farm operation. Going through a divorce is a financial burden. There is a settlement that needs to be paid out and possible tax consequences when assets are divided. Involve your accountant in the process. Work with the lending institution(s) as needed. At the end of day, however, separation and the divorce are
highly stressful and emotionally charged. Going through a divorce is a grieving process. Seek professional support. The stress of going through a separation then the divorce was unbearable at times. The lawyer was sympathetic but said we needed to treat it as a business transaction. Some days it was all too much. My friends encouraged me to get help. Gave me a list of people to talk to: the farm stress line, a counsellor, clergy... I finally went and saw a counsellor through adult mental health services in town. It helped.
3. RESOLVE TO SETTLE AS QUICKLY AS POSSIBLE Divorces that drag on have the most problems. Make it a goal to come to an agreement early
on. Stay the course of working through the process as amicably as possible. Resolve to pay your share as quickly as you are able. Our family lawyer encouraged us to come to an agreement sooner than later. Good thing, or it could have cost a lot more. Worse yet would have been going to court. Glad we didn’t have to go that route.
4. BE FLEXIBLE WITH CUSTODY If children are young, consider how you want to be involved in their lives as they grow up. Be flexible when it comes to child support custody. This will help all of you in the long run. We had to figure out custody with child sharing. Kept being reminded that if we could work this out ami-
cably it would be in everyone’s best interest. I want to stay involved in my children’s lives. Had to think ahead — to their birthdays, graduations, weddings. It was important to give a little so I could have them in my life.
5. RETHINK HOW YOU FARM It may be daunting to continue farming but it can be done. Make decisions how to maintain the operation. It may mean selling land initially with the goal to buy back in the future. For some, starting over may be the best option under the circumstances. Consider the practical day-to-day farm operation. Farm operators who rely heavily on family members for support and labour may
need to consider hiring help and the cost involved. I never realized how important the kids and my wife were in helping out on the farm — especially with the dayto-day support. After the divorce, I had to downsize. I had to bring in hired help during seeding and harvest and rely on outside help more than I would have before. It’s an extra cost. Looking back, it wasn’t easy going through the divorce. It was complicated and stressful. And it was hard financially. I was able to arrange payments that I could manage and still keep farming. The main thing is I survived. You can too. † Sharon Elliott is a freelance writer in Weyburn, Sask. Thanks to Norma Buydens, MA, LLM, JD of NSWB, Weyburn, Sask. and Patricia Farnese, BA, LLB, LLM, Assistant Professor, College of Law, University of Saskatchewan for providing insight and advice.
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