Could A Prenup Protect My Family Business?
Posted on 24th March 2020
We, MG Legal Solicitors in Preston, come across all walks of life and being in a more rural location we often run into more farmers than our counterparts in the centre of Manchester or London, would. In this line of work, we often see farming families who are close knit, working together for the benefit of the whole of the family.
Unfortunately though in this line of work, we also see instances where the incredibly long hours, the weeks of not getting enough sleep during lambing season, the stress of machinery breaking at silage time, the milking parlour freezing at winter time and the inconsistency of market prices taking their toll (to name but a mere few of the problems farmers face) and ultimately leading to relationship breakdown and divorce.
Farming partnerships are usually, by their very nature complex, meaning that divorce settlements can have a profound impact on the future of a farming business. As, property Solicitors in Preston and Lancaster, our property experts regularly see the transfer of property and assets from parents to their children as part of tax planning but our family law Solicitors in Lancaster and Garstang, always ask Clients to consider what may happen if a “next generation” marriage should fail. The answer is usually a misplaced faith in natural justice along the lines of “this business has been in the family for years no one can take it off us”.
What should we do to protect our family farm from divorce?
We would always recommend that you are proactive from the start, contact your solicitor to implement practical measures to protect the business, pre-nuptial, post-nuptial and cohabitation agreements can assist to achieve this.
What is the starting point for divorce when there is a family business involved?
When a couple divorces all of their assets are taken into account regardless of where they came from. That generation old family farm and land begins to look instantly less secure when the driving forces for reaching a settlement will be the principles of equal sharing and need. Meaning that the farm, the principle asset of the business could be considered as “up form grabs” even if it was brought into the business though one party inheriting the farm and land.
Does a farm always have to be split up in a divorce?
The Family Court will take into account factors such as the length of the marriage, how the farm was acquired and who else has an interest in the business and land (think siblings). The longer the marriage the more likely it is the farm will be shared.
Will a family trust protect a family business from Divorce?
Not necessarily, it appears that the Family Court would prefer to consider a pre-nuptial agreement to inform them of the shared intention at the outset of any marriage when deciding how a farm or business should be treated. A properly prepared agreement is crucial evidence of both parties’ financial intentions and the court will place great significance on a clear comprehensive pre-nuptial agreement.
I am already married can I still get a pre-nup?
No, but you could still enter into a post-nuptial agreement as a way to ensure that intention with regard to the farming business can be achieved should you later find yourself in a position considering divorce.
Avoid a one size fits all approach and contact your local family law Solicitor at MG Legal who will consider the different options that can work for your family and joint objectives to create future certainty for your family.
Contact MG Legal now via firstname.lastname@example.org or call 01995 602 129.
MG Legal – Your Local Solicitors
Tagged as: Family Solicitors Lancaster, Garstang Solicitors, Solicitors in Preston, Your Local Solicitors
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