Why pre-nuptial agreements are more common on the farm

The pre-nuptial agreement sets out how a couple wish their assets to be divided, or in some cases wholly retained by one party, if they later separate or divorce. It is generally entered into in order to protect individual livelihoods or to maintain an inheritance in a family line and has particular relevance for the farming community.

Farms and farmland can be a huge and contentious inherited asset especially when it is considered in the breakdown of a relationship. This is where a pre-nup can provide some assurance that despite the marriage finishing the farm stays in the family line. But is a ‘pre-nup’ worth the hassle?

Greg Cross is a family law associate with Crombie Wilkinson solicitors in Malton. He deals in private law specifically in matters of divorce and separation.

“I actually feel they (pre-nups) are becoming more and more relevant and as such more common. One of the trends I’ve found is that a lot of people are divorcing and remarrying later in life. Those couples may have already been married once or maybe twice, they may have adult children and significant assets accrued. When they get married again they want to ensure protection for what they may be leaving for their children.

“The pre-nup is a bit of a weird thing. It can appear to some as quite distasteful to be talking about getting married with all of the excitement that normally entails, but then you are also sitting down and deciding how everything is to be split should the other scenario come about and a lot of people are put off entering into pre-nups by that. The thing is that if you want to safeguard a specific asset to the best of your ability that’s what you should be doing.

“In the agricultural industry when people are getting divorced there is usually the argument that the farm is an inherited asset that has been in the family for generations and as such, when distribution of assets is considered, it should be ring-fenced. These are the people that really need pre-nups.”

But do ‘pre-nups’ actually guarantee safety of asset? It’s not as simple as that, Greg explains.

“The pre-nup is not legally binding in court, but if it has been handled correctly and both parties have been satisfied with their separate legal advice and what is contained in the agreement then a lot of weight will be attached to it.

“It will never oust the court’s jurisdiction because it is always looking to achieve fairness over housing and income needs and the welfare of dependent children, but if someone running a farm on land they had inherited and were talking about getting married a pre-nup is something I would advise them to enter into.

“The first question I asked one farmer/landowner recently, whose marriage had unfortunately broken down quite quickly afterwards, was whether he’d had a pre-nup. He put his hands on his head straight away and told me he knew he should have.

“Although the duration of the marriage meant that there would be different factors to consider than a much longer marriage where both parties would have contributed over a far more extended period at least with a pre-nup in place he would have known straight away pretty much what the outcome was going to be in his scenario.

“The way to look at it is this: it gives parties a degree of certainty and clarity. It gets things out in the open at an early stage and it means you can avoid some of the stresses if at any point in the future your marriage breaks down. It gives you something to fall back on.

“In the absence of a pre-nup the usual factors apply. The court will look at what the parties have available between them, what their respective needs are moving forward and how they can best meet them in as fair a way as possible.

“Where inherited assets are concerned if everybody’s needs are met and the inherited asset can be safeguarded then that can provide a satisfying outcome for that party, but if needs dictate that an inherited asset needs to be looked at then it will be considered.

“If there is a really tight pre-nup that both parties have entered into freely, and by that I mean both have had separate legal advice and it has been entered into at least 28 days before the marriage, this can make a difference.”

Greg tells of how the rush to court is not as prevalent as it once was.

“People used to rush to court, but there is a lot of focus now on ADR (Alternative Dispute Resolution) using mediation and other outside court methods, however there are times when ADR can last longer rather than being cheaper because a case can then drag on if parties are not carrying out what they should be doing on points agreed.

“At least when court proceedings are issued there are timescales, deadlines and sanctions if they are not met.”

Crombie Wilkinson solicitors are on the National Farmers’ Union’s solicitors panel and cover North Yorkshire.