When practicing matrimonial law, the first thing Wynyard, Sask., lawyer Bill Klebeck asked farmers seeking a divorce was, “how many kids do you have and what do they do?”
“If they’ve got grown children who are farming with them or who are taking over the farm, then you take a different approach, rather than saying, ‘we’ll divide everything up equally.’
“Doing the separation part is probably the easiest part. The estate planning part is the hard part.”
Choices and decisions
If for example, he says, the couple owns eight quarter sections of roughly equal value, each could take half, or four quarters.
Or, they could continue to own the land jointly. A divorced couple can jointly own assets.
If the husband is still farming and the wife wants a stable source of income rather than just the ownership of assets and if they’re joint owners of this hypothetical eight quarters, it might be better, he says, to leave it that way and have the husband make payments to the wife as opposed to dividing up the assets.
“They would want to have an agreement, a separation and interspousal contract, that provides the land would be jointly owned, neither party can sell.”
On the other hand, they could divide the land up and have an agreement that neither could sell their share as long as their children are farming it or involved in the farming operation.
There must be a separation agreement and estate planning. New wills must be done for each party.
In his practice, Klebeck has used mirror wills, which duplicate, or mirror, one another. If a couple had mirror wills and either of them died, that person’s ownership in the farm would go to the kids.
Couples divorcing could also face the same dilemma that besieges non-divorcing couples, how to make things fair for the kids that aren’t farming. The answer would be the same, possibly cash or insurance.
If cash assets don’t amount to much and the divorcing couple is too old to buy life insurance, then the child who is farming could pay an agreed-upon amount of dollars per year to the child who is not farming for a specified length of time. Land could be left to a non-farming child with the provision that they rent it to the farming child and if they wish to sell, they must offer the land to the farming child.
Every situation is different, Klebeck says. And each has its own plot twists.
“It can all be done by agreement providing they agree,” he says.
“A smaller farm could be put under by a separation. If you don’t plan together you could go out of business.”
If an agreement cannot be reached the couple could end up in court where the assets would be divided for them. The viability of the family farm could certainly be affected.
Before that happens, he suggests couples consider engaging a mediator or collaborative lawyer, rather than a divorce lawyer.
A mediator meets with both parties and tries to mediate an agreement. A mediator is not an arbitrator and cannot force an agreement upon the parties.
If they choose the collaborative process, each party must engage their own collaborative lawyers and both parties must be represented by their own lawyer, trained in the collaborative process to proceed.
The collaborative process starts by asking each party what is important to them.
Is it important to be happy? Is it important that the kids are looked after? Is it important to be able to afford to go to Arizona every winter?
“Through the collaborative law process, you work towards how you can accomplish what’s important to each individual as best you can,” says Klebeck.
This includes disclosing financial statements and assets and arriving at an agreement. It doesn’t start with positional bargaining; it starts with what’s important to each individual.
Klebeck has worked as a conventional divorce lawyer, but has ceased practicing matrimonial law. He is trained as a mediator and as a collaborative lawyer. Regarding the three paths to divorce, he rates collaborative as the best, followed by mediation and conventional.
A lawyer says separating is the easiest thing to do when a couple decides to split up; estate planning is the hard part