Pre-nuptial agreement should be considered for anyone who has substantial assets, or who is entering into a second marriage after accumulating wealth over the years.
Celebrity divorce lawyer Raoul Felder once said, “Today, if you don’t have a pre-nup, and you’re getting married, you ought to see a psychiatrist, not a lawyer!”
That might make some people laugh, but the reality now is that, for anyone who has substantial assets, inherited, or set up a business or who is entering into a second marriage after accumulating wealth over the years, it is a document that should be given consideration.
A recent survey indicated 72% of farmers are in favour of pre-nuptial agreements.
A pre-nuptial agreement can be viewed as good planning.
If the goal is to keep the farm in the family, a pre-nuptial agreement can be helpful, because farmers’ circumstances are unique.
Many farmers are reluctant to transfer the farm to their son or daughter, for fear that it might form part of the pot of assets that can be sold or divided by a judge in the event of a marriage breakdown.
Farms that have been in families for generations could form part of a divorce settlement.
Farms are often inherited and kept within families for generations, and sometimes the ownership can be shared with parents or siblings, which may prevent an order for sale or division.
The value of farmland is usually significant, compared to the income generated from it.
A smaller holding will not usually be viable and capable of providing an income.
A pre-nuptial agreement is a written contract created by two people who are planning to be married.
It typically lists all of the property you both own, your assets, and your debts and it specifies what will happen to those assets and debts in the event of marital breakdown.
So, is a pre-nuptial agreement binding?
There is no Irish legislation preventing parties entering into a pre-nuptial agreement.
However, the Courts are not obliged to enforce such an agreement, in the event of a marital breakdown.
This may of course may change in time.
Here are some tips on how to approach a pre-nuptial agreement
n Discuss the matter with your partner, explain why you would like to enter into one.
Even if you don’t get a pre-up, have that brutally honest financial conversation before you are married.
* The agreement must be in writing.
* Do not hide any assets.
If additional assets are discovered after you are married, the pre-nup may not be taken into account.
Full disclosure of assets and debts is essential.
* Do not spring it on anyone. Give the other party adequate time to read, review and contemplate and amend the agreement.
* Equal bargaining power between the parties is essential. Both parties need to be independently advised.
No person should feel forced into signing.
* Depending on the age of the couple, a review clause should be inserted to allow the agreement to be reviewed every few years, as circumstances within the marriage change, for instance, the arrival of children, or the acquisition of further assets.
* The Court has the power to transfer or sell assets under a judicial separation or divorce.
This is known as a property adjustment order.
The court when making such an order must ensure that proper provision is made for both parties and children.
So, rather than a learned judge deciding on how to best divide marital assets and a farm, perhaps consideration should be given to both parties deciding themselves how their assets are to be split in the event of marital breakdown, to avoid a long, costly and protracted legal battle.