Marry me, my farm and my pre-nup?
With the height of wedding season nearly upon us, family solicitors find themselves increasingly busy advising and negotiating their client’s pre-nuptial agreement in advance of the big day. Whilst many may still seek to argue that to enter into a pre-nuptial agreement is unfair or unromantic, (what is a marriage after all if not to share and for better or for worse?) many more clients can rightfully argue that by being able to openly discuss and scope an individuals’ financial expectation should the marriage not survive the test of time, that this, in itself, demonstrates a certain honesty and integrity that would put many marriages in good stead for long-term happiness.
I am often asked to identify whether there is a stereotype client who seeks a pre-nuptial agreement. It may come as a surprise that it is not always the wealthiest clients but those clients with mutual respect for each other’s assets. There is often an understanding of the need to protect family legacies, be it to safeguard land and farms that have been in families for generations, or where assets have been built up in the years before meeting their future spouse. Pre-nuptial agreements can also often be used to put to rest concerns from family members, whether it be children of a previous marriage or the concerns of wealthy elderly parents.
As to the legal enforceability of pre-nuptial agreement in the UK, whilst not yet legally binding, when taking into account ever progressive case law in this area, it is clear that they carry greater and greater weight with the courts and within matrimonial proceedings. When properly entered into, pre-nuptial agreements can vastly reduce not only the financial, but more importantly the emotional strain of negotiating a financial settlement where marriages break down.
The benefit of entering a pre-nuptial agreement is to regulate how assets built up either prior to the marriage or through wealthy family businesses should be dealt with upon a divorce, as well as to consider and agree how joint marital income and responsibilities should be recognised and quantified. Where farming communities are concerned, properties as well as business interests are often passed down through to the next working generation and for this reason there is often good reason to consider protecting these interests by way of a pre-nuptial agreement.
Pre-nuptial agreements are not entered into lightly. To be of use, proper and timely consideration needs to be given as to the terms of the agreement as there is no one size fits all. The agreement needs to be fair, entered into without pressure and prepared with the benefit of financial disclosure, independent legal advice and in good time prior to the wedding.
In conclusion, there is considerable benefit in early discussion as to the treatment of “separate property” within a pre-nuptial agreement. With respect to our agricultural clients this would often include the ring-fencing of shareholdings in family farming businesses, as well as the interest in the matrimonial home where this property is often part of the overall farm itself.
Mei-Ling McNab is a Partner in the Family team at Brachers. Please contact the team to discuss any issues raised in this article on 01622 690691 or Mei-Ling on Mei-LingMcNab@brachers.co.uk.