Barker Gotelee

Farming families often have the expectation that their assets will pass automatically from parent to child, providing a living from the land for successive generations.  This expectation coils around the family, appearing to give the security of an electric fence providing protection, not only from escaping livestock, but an attack on family assets from outsiders.

Too late, many farming families learn that their electric fence gives scant protection, when a spouse wanting a divorce devastates the family assets by grabbing a handful to take on their way.  Farmhouses and land are all fair game in a divorce.

Farming families may benefit from a new ruling that could pave the way for pre-nuptial contracts to become legally binding in England and Wales.  The court recently dealt with a case in which the husband, a Frenchman, and the wife, a German, signed a pre-nuptial agreement.  The wife was one of the wealthiest women in Germany and her father feared that she would marry a gold-digger.  The marriage lasted only five years, although it produced two children and the husband was initially awarded £5.8 million of the wife’s £100 million fortune.  This was only around 5% of the assets but 5% more than the husband had agreed to accept in a pre-nuptial contract.

The wife appealed.  On appeal the Court reduced the sum to £1 million, giving the pre-nuptial contract a great deal of weight.  One of the country’s senior judges said that it was increasingly unrealistic for courts to simply disregard what two autonomous adults had previously agreed, in an era when marriage was no longer regarded as sacrosanct and divorces are two-a-penny.  However the Court had to balance the agreement against other factors, such as the husband’s need for maintenance, as at the time of the hearing he was in receipt of a small salary compared to the wife’s own income.  The £1 million award was given as a lump sum in lieu of maintenance, in addition to which the husband received £2.5 million, for a house, returnable to the wife when their youngest child reached the age of eighteen and £700,000 to discharge his debts.

As soon as a member of a farming family becomes engaged thought should be given to whether a pre-nuptial agreement should be entered into to regulate the financial settlement in the event of a divorce.  If this is to be effective sufficient time must be allocated to agreeing and drafting this document (months not weeks) as both parties must give full details of their financial position and take independent legal advice without pressure from the other.  Whilst no lawyer can currently promise that the existence of such an agreement will bind the court the time may come, and perhaps sooner rather than later, when that changes.

Nicola Furmston

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