Prenups have become increasingly common in recent years in the UK as couples look to have agreements in place before the big day.
And, according to Julian Hawkhead, senior partner at Stowe Family Law, the stigma surrounding these legal documents is gradually reducing as millennials play their part in ‘normalising’ them.
Mr Hawkhead said prenups were intended to remove uncertainty from a future divorce, something especially important in farming divorce cases which are often quite complex as assets have been passed through generations and there is a desire to retain them in the family bloodline.
He added this was made more complicated as various family members across different generations may have an interest in the farm or occupation rights.
Mr Hawkhead said: “These complex ownership structures mean prenups are particularly helpful in reducing confusion around who should rightfully get what in the event of a divorce.
“Secondly, in a farming business one can often find limited liquid funds, due to limited income.
However, the overall capital value of the land, buildings and other assets hold significant value.
“This can mean that it is difficult to raise the money to fund a divorce settlement.”
The viability of the farm would ‘almost inevitably’ be compromised if one party tried to leverage assets through sales or heavy borrowing to raise capital to fund a financial payment.
Mr Hawkhead said several high-profile court cases had paved the way for creative solutions to be found when obtaining a fair settlement in farming-related divorces.
He said lump-sum payments could be made over several years to the former spouse if funds were not immediately available, or an organised sale of certain assets would be possible.
“However, the courts are sensitive to the significance of the farm as a home and as a livelihood to the family and would be reluctant to go down the route of selling the business,” Mr Hawkhead said.
A prenup can record what assets are not regarded as ‘shareable’ and make clear who brought what into the marriage as well as anticipating future inheritance.
“An important thing to ensure is if significantly valuable assets are intended to be preserved in this way, serious consideration should be given to making provision for the other party’s financial needs,” he added.
A court will recognise a prenup provided the following points are considered: