Historically, divorce by farm couples was less frequent than by other married U.S. couples until the Farm Crisis of the 1980s. Divorces between married farm partners increased to equal the rate of all U.S. divorces, which was then about 22 per 1,000 couples annually. About 40 percent of all marriages ended in divorce.
Since the 1980s, the divorce rate of all U.S. married couples has dropped to 16.7 per 1,000 couples yearly, according to The National Center for Family and Marriage Research at Bowling Green State University (www.bgsu.edu/ncfmr.html). The divorce rate of farm couples in the U.S. declined even more; it was estimated in 2012 to be about 60 percent of the U.S. average, that is, about 10 per 1,000 farm couples yearly, based on occupational data from the 2000 U.S. Census.
The U.S. Census Bureau eliminated "farmer" as an occupational choice on its more recent census forms, perhaps because only about two percent of the general population are engaged in farming these days. Demographers and researchers examining divorces of farm couples now have to rely on other sources of information about the occupations of married and divorced people.
Legal complications about property ownership, responsibility for debts, retirement fund distributions and the inheritance of an estate are among the many issues that have burgeoned for farm couples over the past two decades. These matters can be more difficult to resolve than child custody issues.
Blame about who is most responsible for ending the relationship, as well as retribution for such perceived wrongs as an extramarital affair or excessive devotion by a partner to the farm, can become entangled in the financial aspects of their dissolution. Fighting, whether legally, verbally or physically, makes things worse for everyone. Letting go of fighting facilitates movement toward resolution.
Today's article focuses on what can be done to resolve disputes about property and financial matters by farm couples during their divorce. Next week's article will look at the behavioral wellbeing of families undergoing divorce.
Do prenuptial agreements help? Prenuptial agreements can assist in settling divorces by some farm couples and complicate settlements in other cases.
My experience working with divorcing farm couples and when giving testimony in court proceedings is that prenuptial agreements help more when they are fairly recent. The "older" the prenuptial agreement that both partners agreed to, the more difficult the resolution of ownership becomes for property, debt and future obligations in wills and estate settlements.
Courts can set aside prenuptial agreements and treat a farm as a marital asset even if only one partner brought the farm into the marriage or purchased the land after marrying, and more likely so when farming-related bills were paid out of a joint account or an account under the name of the other partner. Keep in mind that laws pertaining to these matters differ from state to state.
While some lawyers and business advisors feel prenuptial agreements should be part of a farming operation's risk management plan, others contend that prenuptials increase distrust and emotional uncertainty between the partners. Instead of providing comfort, the document can generate suspicions and incite the spouses to outmaneuver each other.
A letter of instruction is a less formal document that accompanies the prenuptial agreement or estate plan; it can help clarify and settle complicated divorces between farming couples.
A letter of instruction should indicate intentions about how to deal with potential issues that might arise if divorce occurs. These include the following:
• The letter of instruction should indicate why the couple married.
• It should declare that their marital commitment was made with full knowledge of their respective situations at the time they signed the letter of instruction and that each partner freely made the marriage commitment without impediments, such as illness.
• It should indicate they were happy together, aware of the consequences of their agreement, and intended for their marriage to succeed.
• It should recommend how the farmland, additional acquisitions, other assets and responsibilities should be distributed if the partners dissolve their marriage or if one of them dies.
• The letter of instruction should indicate plans for having and raising their children, including their children's involvement in the farm operation and possible succession to the farming operation.
• The letter of instruction should be agreed upon as fair when the partners sign it.
What is the end result of a letter of instruction? Although it has less precedence than a prenuptial, it can have considerable weight in a court settlement of unresolved issues that arise about splitting property, obligations and future succession of the farm, and especially when it is updated periodically.
Couples should keep in mind that sometimes divorce is the best solution to a conflicted situation in which there is little hope for change. Stay tuned for next week's column about how divorce affects children, their parents and extended family members.