Prenuptial agreements on the agenda
And the lack of public reaction to their latest plea to Minister for Justice Alan Shatter to change the law indicates that the country’s dire financial situation may have relegated romance to the back burner, when assets and livelihoods are the main subject matter.
IFA president John Bryan will find it easier to get broad public backing now for his call that the Government give legal status to pre-nuptial agreements, as part of its family law reform programme.
Pre-nuptial agreements are entered into by parties who seek to regulate their affairs in the event of a breakdown of a marriage, or civil partnership.
They are part of the family law system in many other common law countries. The agreements are commonplace in the US, where they stipulate that anything made or acquired during the relationship is part of a separation or divorce agreement, but assets owned by a person before they marry are protected.
In the EU, Ireland and Britain are the only countries that do not have legislation on pre-nuptial agreements.
There is nothing preventing anyone intending to marry from signing a prenuptial agreement. The issue is that the courts here are not obliged to enforce it, if the couple should separate and or divorce at a later stage.
Pre-nuptial agreements are being taken into account in Britain during divorce cases. They carry much more weight there since the Radmacher v Granatino case. Ms Radmacher came from a wealthy German family, and her father threatened to disinherit her if she did not enter into a prenuptial agreement before marriage. The agreement restricted her husband’s claims on her £106 million fortune, and he lost out in the British courts when he challenged their divorce terms.
Here, IFA has helpfully outlined a draft pre-nuptial agreement for its members that could protect the family farm and prevent it being broken up into unviable smaller holdings in divorces.
Under the proposed agreement, a couple would complete an inventory of assets each person held before the marriage and agree that in the event of a divorce, each would be entitled to keep those original assets.
However, any new assets acquired during the course of the marriage, such as improvements or additions to the farm, would be divided between the couple.
IFA’s interest in this area arises primarily from seeking to ensure orderly and timely inter-generational transfer of family farms.
They are responding more to the needs of the older generation than to eligible young farmers.
Outside of farming, surveys have shown that 32% of parents worry about leaving an inheritance to their adult children, because they fear it falling into the hands of their son-in-law or daughter-in-law in the event of a divorce. In farming, parents who slaved to keep the farm together are even more determined to keep their inheritance intact in the next generation.
They know that up to 6,000 Irish couples end their marriage through divorce or judicial separation every year. Two out of three Irish divorces are filed by women.
It is estimated that one in six of all farmland sales are due to marriage splits. And if a son or daughter has to sell the family farm to facilitate a marriage break-up settlement, the capacity of the business to provide reasonable income to all parties concerned is gone, and with it the security which the parents had hoped for in their later years. How some of the older generation is reacting is to transfer only part of the farm to a son or daughter.
Some are being legally advised to defer transfer of the family farm, or to or to hold onto it for their lifetime, because the risk and possible dire consequences of an heir divorcing are too high. This is a worry for the Government, which has identified greater land mobility and involvement of young farmers as a priority for agri-food progress.
Previous governments introduced costly supports and incentives for early family farm transfer, such as stamp duty relief for young trained farmers. They are still in place, nevertheless, the age structure in farming has continued to deteriorate.
* Love and marriage will continue unabated in rural Ireland, but it looks like the financial pressures of today will ensure that relationships are hemmed in by legal safeguards for assets and livelihoods. At least, the older generation of farmers and the legal profession will be happy.
