Do I Have to Sell My Farm in a Divorce? Understanding Property Settlements for Farming Families

QUICK ANSWER

No, you don’t automatically have to sell the family farm in a divorce, but you may have to if it is the only way to pay your ex-partner their fair share. The Family Court and Federal Circuit and Family Court of Australia (FCFCOA) don’t give farms any special legal protection: they’re assessed under the same property settlement principles as any other asset (Lee Steere v Lee Steere [1985]). In practice, courts try to avoid a forced sale where possible, especially when one spouse’s income depends on the land. Common alternatives include one spouse keeping the farm and paying out the other’s entitlement in cash or over time, transferring other assets instead, or restructuring ownership through the farming trust or company. Whether you can avoid a sale usually comes down to how much of your total property pool is tied up in the farm and whether the farming spouse can afford to pay out the other party without selling.

In short:

• Farms get no special treatment under the Family Law Act 1975 (Cth) — same rules as any other property.
• Courts will try to avoid a forced sale where a fair alternative exists (e.g., a cash payment, refinancing, or transferring other assets).
• A sale becomes more likely the smaller your total asset pool is outside the farm.
• A Binding Financial Agreement made early can significantly reduce this risk.
• The process for weighing all of this changed on 10 June 2025 under the Family Law Amendment Act 2024 (see below).

Separating from a partner is never easy, and it can become even more complicated when businesses such as intergenerational farming enterprises are involved.

Farms are often more than just assets on paper. They represent legacy, family history, and years of hard work. That deep emotional and financial investment can make property settlements in farming families particularly complex.

In many cases, a farm has been in the family for generations, with a spouse dedicating their life to working the land in the hope of one day passing it on to the next generation. That creates a strong emotional tie to the farm, which makes the property settlement process difficult. It also raises a practical problem: meeting the other spouse’s entitlement (typically a cash payment) without selling the family farm, since farmers are often asset rich but cash poor.

Does the Family Court Treat Farms Differently?

Many clients are surprised to learn that there are no special legal protections for farms in property settlements. Courts apply the same principles to farms as they do to other types of property, even if a spouse has spent their entire life working the land.

Before 1985, the Court did consider that land used for farming purposes to produce an income sat in a separate category to ordinary real estate. In Scott v Scott (1977) FLC 90-251, Demack SJ held that farming land was to be treated differently to the former matrimonial home. At paragraph 7, His Honour said: “In my view land which is used for farming purposes and which is essential to the production of an income is in quite a different category from land which simply provides a place for the family home. If the continued availability of the land is essential to one spouse as a place on which to work and produce income, in my opinion, any property order affecting such land should not affect its production capacity or seriously reduce its income producing potential.”

The statement of Demack SJ was also agreed by Asche SJ in Magas & Magas (1980) FLC 90,995. However, His Honour added at paragraphs 13 and 14: “I would agree, with respect, with what his Honour there says but with this rider: If arrangements can be made which would relieve the spouse who is working a farm as a farmer, from selling the farm but at the same time doing proper justice to the claim of the spouse who is not living on the farm, then of course those arrangements should be made… If there is no other way to do that which is just and equitable then a sale must take place.”

In 1985, the Court’s approach shifted following the Full Court decision in Lee Steere v Lee Steere [1985]. His Honour stated:

“If there is no other way to do that which is just and equitable then a sale must take place. It becomes an incident of the sad fact that, when two persons separate, property which might have given them together a reasonable competence will not be sufficient for each when divided. That is an inescapable situation and cannot be used as an argument to deprive one party of that to which he or she is otherwise properly entitled.”

“The fact that the subject of property proceedings under sec. 79 is a farm may give rise to considerations as to the way and means by which property division should be effectuated… but there is no ‘farming case’ exception to the ordinary principles applicable under sec. 79 of the Act.”

“We must therefore reiterate that in relation to farming properties, as in relation to all other assets be they business assets or suburban land, the ordinary principles of sec. 79 of the Act apply.”

Lee Steere also confirmed that the Court must consider the effect of any proposed order on a party’s earning capacity, noting that “an order which would deprive a party substantial[ly] of what he or she is entitled to by reason of contribution would not normally be considered just and equitable.”

Since then, the courts have treated farms no differently to any other business in family law proceedings. No “special consideration” is given simply because a spouse has inherited or acquired a farm, even if that means the farm must ultimately be sold.

Recent Family Farming Case: Leeming & Estrada [2023]

Citation: Leeming & Estrada [2023] FedCFamC2F 729

In this decision, the Court considered a 12-year relationship between a 65-year-old Husband and a 61-year-old Wife. The parties had no children together, though both had adult children from previous relationships. The Husband owned the farming land before the relationship began.

The Husband’s evidence at trial was that farming had been his livelihood for approximately 45 years, that his ability to earn an income depended on retaining the farming land, and that the land had been in his family for decades with a strong intergenerational connection he wished to preserve (see paragraphs 225-226).

The Court ordered the Wife to transfer her interest in the farming land to the Husband in exchange for a cash payment, allowing the Husband to keep the farm. However, the orders also provided that if the Husband couldn’t pay the Wife her entitlement, the farming land would need to be sold. At paragraph 232, the Court noted: “It is well established that although a party having owned land prior to cohabitation it is a relevant and important factor, particularly in the case of farming land that has been worked by that party, and owned by their family over an extended period of time, where there is no other way to achieve justice and equity between the parties, that land must be sold.”

How Courts Approach Property Settlements

Since 10 June 2025, the Family Law Amendment Act 2024 has restructured how the Court works through property matters under section 79 of the Family Law Act 1975 (and section 90SM for de facto couples). The underlying five-step approach farming families are used to is still there, but it’s now expressed differently in the legislation, and it picks up some new factors along the way:

1. Just and equitable threshold (s79(2)): Determining whether it is just and equitable to alter the parties’ property interests at all.
2. Identifying property and liabilities (s79(3)): Identifying the existing legal and equitable rights and interests in property, and the liabilities, of both parties.
3. Contributions (s79(4)): Identifying the financial and non-financial contributions of the parties, including contributions made before, during, and after the relationship, this is where a farm’s ownership history and the work put into it by each party is weighed.
4. Future needs (s79(5), replacing the old s75(2)): Weighing each party’s current and future circumstances, including health, age, income, and care of children (the same framework applies to de facto couples under s90SM(5)). This subsection now also expressly requires the Court to consider the economic effect of any family violence, wastage of property or financial resources, liabilities incurred by either party, and the housing needs of any child under 18, factors that weren’t spelled out this explicitly before the amendment.
5. Just and equitable outcome (s79(2), applied again at the end): Considering whether the proposed division is just and equitable in all the circumstances, taking steps 2 to 4 together.

The Act also gave the Court an explicit, separate power to deal with companion animals (new s79(6)-(7)), which sits outside the property pool process above.

A note on the older cases discussed in this article: Lee Steere, Casper, Cromwell, Fischer, and Leeming & Estrada were all decided before 10 June 2025, under the previous numbering (section 75(2) for future needs, and section 79(4)(d) for the effect of an order on earning capacity, referred to in the Lee Steere extract above). The amendments didn’t overturn any of these decisions or change the principle that farms receive no special treatment; they restructured where in the Act these considerations sit and made a small number of factors (family violence, wastage, housing needs) explicit rather than implied. When discussing these cases with a farming client today, it’s the current s79(3)-(5) framework that applies, with the case law providing guidance on how the underlying contributions and future-needs concepts play out for farming property specifically.

Although Lee Steere confirms that farming matters aren’t given special treatment, certain unique aspects of farming cases are still weighed within this process. For instance:

Considering Initial Contributions

This includes looking at whether the farm existed when the couple began living together, what it was worth at that time, and whether the spouse who brought the farm into the relationship was already working on it, sometimes on the understanding that they would one day own it.

For example, in Casper v Casper [2009] FamCA 989, the Court examined a 16-year marriage where the couple took on traditional roles: the wife managed the household and cared for the children, while the husband ran the farm and was the primary income earner. The Court ultimately awarded 70% of the property pool to the husband because of his significant initial contribution. At the time of the marriage, he already held substantial assets through a family trust that included the farming property, then valued at around $2 million. By trial, the farm had grown to approximately $9.75 million, making up the bulk of the property pool.

Considering Future Needs

The Court also looks at what each person will need moving forward, including:

• Each party’s financial and personal needs after separation. Can the farming spouse find other employment if they no longer have the farm? Did the non-farming spouse spend significant time helping on the farm, limiting their own career?
• How much of the total property pool is tied up in the farm, including land, livestock, machinery, and other farming assets.
• Whether the farming spouse can pay the non-farming spouse their share without selling the farm.

Other Farming Cases Worth Knowing

• Cromwell v Cromwell [2006] FamCA 1454
• Fischer & Fischer [2014] FCCA 1088 (6 June 2014)

How Can I Protect My Farm in a Separation or Divorce?

If you’re part of a farming family or own a rural property, protecting your farm before a relationship breaks down is crucial. One of the most effective ways to do this is by putting a Binding Financial Agreement in place early in the relationship.

For example, if you’re planning to bring a family member into a farming business but want to ensure their partner doesn’t gain a share of the property if they separate, a Financial Agreement can clearly set out how the farm will be handled. These agreements help protect family assets, including farming land and trusts, from future disputes.

It’s also worth reviewing the farm’s ownership vehicle itself. If the property sits inside a family trust or company structure, or you’re working through a broader succession plan for handing the farm to the next generation, aligning that structure with your Financial Agreement adds another layer of protection.

The Family Court treats farms the same as any other property, even one that’s been in the family for generations. That’s exactly why getting legal advice early can make all the difference later.

At Ramsden Lawyers, our experienced family lawyers provide advice specific to you and your family’s circumstances. We understand both the emotional and financial impact of separation and can guide you through your property settlement with practical, outcome-focused advice. Contact us today for guidance on protecting your farm and rural assets during separation or divorce.