Author Len Deighton once said "Divorce is a system whereby two people make a mistake and one of them goes on paying for it." The majority of those who have experienced an adversarial divorce would echo this sentiment. Whether that cost is financial or emotional, the lasting effects of separation and/or divorce on a farmer and his or her farm are devastating.

On marriage breakdown, each spouse is generally entitled to equal division of the family assets. In a farming situation, that equal division can encompass assets which seem indivisible – buildings, land, equipment, livestock, crops, quota, etc. The reality of meeting the equalization payment while also possibly paying support and meeting continued farm obligations can be enough to result in the sale of part or all of the farm. The Family Law Act provides that no sale of a farm should occur if there are reasonable alternatives to satisfy payment. However, farm sales do occur.

Farmers who successfully manoeuver the financial consequences of marriage breakdown and any required settlement payment are those who are proactive.

Following are eight tips to assist farmers. First, immediately upon separation, consult your lawyer. A common problem following separation is that the farmer makes critical decisions regarding the sale of assets. These decisions can turn out to be harmful. Discussing with your lawyer prior to making these critical decisions allows the legal pros and cons to be weighed. It is important that the lawyer has experience with the unique characteristics of farming as well as family law. Too often farmers do not utilize the special legal protections that are available to them.

Second, if the children live with the non-farming spouse, the farmer should as soon as possible begin payment of child support in accordance with Child Support Guidelines, or as agreed to between the spouses. You are still responsible for your children. Failure to provide support can colour your case in the eyes of the court and may result in a judge taking adverse positions in other areas of your case.

Third, an accurate financial statement is critical. The primary means by which financial information is shared in family law situations is by way of a financial statement. You should immediately provide your lawyer with all RRSP information, bank, credit card and credit line statements, tax returns, farm financials, appraisals, receipts and any other pertinent documents. The farm lawyer and accountant are the farmer’s support team.

Fourth, don’t fight the reality of your situation. It may appear financially attractive to state in your Financial Statement that your farm land is worth $200K when it is actually worth $500K. Appraisals are inevitable, usually one by each side. The closer your estimates are to the actual numbers, the better. As an aside, don’t fight appraisals. An order for appraisal of land, equipment, cattle or anything else that has a value is easy to get. Ensure your appraiser has farm appraisal experience.

Fifth, on marriage breakdown each spouse has an equal right to the matrimonial home and a right to claim exclusive possession, even if the farmer owned the matrimonial home on the date of marriage. It does not matter if a farmer obtained the matrimonial home by gift or inheritance. Depending on the circumstances, a farmer may be able to deduct or exclude most of the farm from his net family property equalization, but the full value of the matrimonial home will always be accounted for at the date of separation.

Sixth, stay focussed. Canadian family law is primarily based on the concept of no-fault. Too often the spouse who is left behind wants the court to punish the spouse who left the family. The role of the court is to divide assets, provide financial support for spouses and children, and dissolve the marriage. The court is not in the punishment business. Huge legal bills can be accumulated when a farmer insists that every perceived wrong be litigated. As assets are wasted, settlement is more difficult to achieve.

Seventh, always be open to settlement. Farmers are frequently asset rich and cash poor. If an equalization payment is required, it can be overwhelming. Working with your team can help determine what, if anything, can be done to structure a payment. The spouse might consider a mortgage against the farm, paid out over a number of years. Again, if the goal is to preserve the farm then there are innovative options to be explored.

The final tip is one that can be done before marriage – a marriage contract. This is especially important where there has been, or will be, generational transfers of the farm or where the farmer purchased the farm prior to marriage. Marriage contracts are agreements entered into between married spouses, or those that are about to be married. A marriage contract can state that the spouse has no claim against the farm and its assets in the event of a breakdown. This is obviously a delicate topic as no person ever imagines their relationship could become irrevocably broken. No farmer ever believes that he could be forced to sell his farm. A voluntary marriage contract, entered into in good faith, is a good way to protect farm assets and, while not romantic, should be given significant thought. It is essential that each spouse have independent legal advice; otherwise the marriage contract will have little binding effect. This also applies to divorce settlements.

Farm divorce law is very unique. It is as much about farming as it is about family. Multi-generation conflicts are frequent. Farmers have a strong attachment to their land, which may have been handed down for several generations. Preserving the farm in the face of need for cash by the leaving spouse requires unique and innovative planning. To properly support the farm, the farmer’s team must know "farming" as well as they know "family" law. Reconciliation should always be considered, usually with the assistance of counselling. The above advice is very general. Always consult your own lawyer first about your particular circumstances.

(Lawyer and Professional Agrologist, Donald R. Good was raised on a dairy farm in Waterloo County, Ontario. His practice is restricted to agriculture, food and environment law. This article was written in collaboration with Lisa A. Lemieux, Barrister and Solicitor. They can be contacted at Donald R. Good and Associates, Suite 207, 43 Roydon Place, Ottawa, Ontario, K2E 1A3; Tel. 1-800-661-8837, Fax 613-228-7404; e-mail farmlaw@on.aibn.com)