When business owners divorce

The Problem (submitted by email from P.N.)

After 40-plus years of marriage, my divorce is final. As part of the settlement, I own half of the farm. Yes, I earned it. We started this farm together and operated as sole proprietors, borrowing money for operations and to purchase land. We kept our family living expenses to a minimum and most all the profit went back into growing the farm, finally paying off all the land debt. We never had extra money for investments outside the farm. I need this settlement income and plan to move out of this community for a fresh start. But now, with the judge's decree, my ex-husband wants me to continue to farm as a partnership. After what he has done to me, I refuse to be in business with that man! My problem? I have two adult children who've been farming with their dad and me for many years, but if I "take my half," there isn't enough farm for them to continue. Can you help me?

Solutions:

I can only imagine your journey and understand the resolution of your new path is just developing. It is critical you have the wise interpretation and advice from your personal (not husband's or farm's) advisers. An attorney, accountant, and financial planner should be able to give you options and the ramifications. Their guidance is key to implementation of the settlement and your future security. The problem you have asked me about regarding the continuation of the farm and your two adult children requires that I hold up a mirror to today's reality so you might progress and hopefully sleep better at night.

Have a Business Owner's Mind-Set

You need clarity about what "owning half of the farm" means. Is your half the equivalent in land to be surveyed off and titled in your name? Was it already negotiated that the farmhouse and outbuildings remain as part of your husband's half for farm operations? Was the decree a dollar amount based on an appraisal, and is how it's to be paid yet to be resolved? Regardless, your concern is your security, and your children and their families' dependence on the farm.

After legal and financial counsel, you may want to approach your children about purchasing or renting the farm assets from you. (This means interaction with your children, not your ex-husband.) There already is a recent appraised value on the farm for a sales price if you choose to sell, but also find out the county average for the type of property if you choose to cash rent. (If you want to avoid farm connections, your advisers will encourage you to avoid crop share leases.)

With any agreement you offer, remember, this is not a gift; you implied this settlement is the majority of your income. A legal contract with specific terms needs to assure that the income creates new financial security for you. Then, if the renter or purchaser does not pay, you would have legal recourse. But, I'm wondering, if you have a signed contract with your children and they cannot or choose not to pay you, are you willing to take them to court? You need to have the mind-set of a business owner, not a mother. Protecting yourself is not being selfish or unloving. It begins necessary independence.

Jolene Brown is a professional speaker, author, farmer, and family business consultant. She shares her passion, experience, and fun-filled spirit with farmers and ranchers across North America. Her tested business tools provide leadership and management solutions for the people who feed, clothe, and fuel the world. jolenebrown.com