We’ve all heard the rumor that spouses “get half of everything” in a divorce. Would that include a farm or ranch that has been in your family for generations?
Probably not. For one thing, in a North Carolina divorce, you have the right to negotiate how your marital property will be divided. Only if you can’t come to an agreement would a judge decide for you.
For another thing, you may have a valid prenuptial agreement in place that would keep your farm or ranch in the family. Additionally, the asset in question must be “marital property” in order to be distributed by the court. If the land has been in your family prior to your marriage and has not been titled jointly with your spouse, it may not be marital property subject to division.
Finally, even if a judge is deciding how your property will be divided, that decision will be made based on “equity.” There is no rule requiring each spouse to get half of the marital estate. Our law specifies that the division be done equitably, taking into account a variety of factors.
Determining what is marital or divisible property
In a North Carolina divorce, property is put in one of three categories:
- Separate property, which belongs only to a single individual and will not be divided
- Marital property, which belongs jointly to the spouses and will be divided equitably
- Divisible property, which basically refers to property existing on the date of separation which grows in value or interest increases in debt, after the date of separation. This property is also subject to equitable distribution.
Your farm or ranch could be ruled separate property. It could also be considered at least partially marital property. The determination is complicated and depends on the specific facts of your case.
If you had a very long marriage, the extent to which your family farm or ranch is considered marital property could be substantial. Nevertheless, you can probably negotiate a way to keep the property in the family. If you can’t achieve that through negotiation, your attorney can argue that it would not be equitable to force a sale of the farm or ranch.
Options for dividing farms and ranches
Ultimately, there may be some or all of the farm or ranch that is considered marital property and must be divided. In such a case, you will need to determine the value of that marital property in order to divide it.
Once you have a valuation you can agree upon, you can usually find a way to buy out your spouse’s share. This could be done directly, by offering cash, or indirectly, by trading other marital assets.
For example, you might determine that the marital portion of the farm or ranch is worth $50,000. In such a case, each spouse would get property worth about $25,000, unless that would be inequitable. Instead of selling the property and giving your spouse $25,000, you could keep the property and give your spouse something else that is worth $25,000.
If you have a family farm or ranch and are considering divorce, discuss your concerns with a knowledgeable divorce attorney who will go the extra mile to preserve your generational property.