Ask The Legal Expert - Can We Protect the Family Farm with a Pre-Nuptial Agreement?
- AuthorPhilippa Buckland
"I own a farming business with my husband and our son, who is making wedding plans with his partner. We are very happy with this news but we are keen to protect the business as a family asset. Can a legal agreement help with this?"
Since farms are often handed down through the generations it is a common scenario for parents and their adult children to run a farming business together. So, it is important for adult offspring in this situation to think about safeguarding the family livelihood in the event of a big change in life-circumstances, such as a marriage. Making sound plans now about how to safeguard the family livelihood will take away any unnecessary worry – so husband-and-wife-to-be can concentrate on the wedding plans.
A pre-nuptial agreement can help in this instance. They aren’t just for Hollywood stars or tech-company millionaires. As long as the agreement you reach is fair to both parties, it can be used to help ring-fence the family business from potentially being dragged into divorce proceedings as a matrimonial asset. A pre-nup is an agreement between the parties to an intended marriage that seeks to clearly regulate their financial affairs, in the event of a relationship breakdown.
These agreements are not yet formally binding in England and Wales. However, as long as certain key criteria are met, pre-nups are proving to be increasingly persuasive. It should be:
- Procedurally and substantively fair - it cannot be obviously unfair to your partner and it must cater for the needs of any future children
- Freely entered into and made by deed
- Made at least 28 days before the wedding and preferably far in advance of it
- Both parties must have received, at the time of the making of the agreement, full disclosure about the other party’s financial situation with each party’s assets and income schedules being annexed to the agreement
- Both parties must have received legal advice during the drafting of the agreement, usually with certificates signed by the parties’ respective lawyers being annexed to the agreement
This is a complex area of law so is vital to seek advice from an experienced family lawyer before drafting a pre-nuptial agreement, so you have the best chance of meeting the above criteria.
The question posed is based upon a hypothetical situation.
This content does not constitute legal advice and is provided for general information purposes only.