Landowners may look to pre-nups to preserve property

LANDOWNERS could soon start insisting on pre-nuptial agreements in order to keep family farms from being broken up, a family law specialist in the Midlands has said.

Jonathan Tougher, partner with MFG Solicitors, said increased divorce levels were putting million pound holdings at risk.

It was, he cautioned, making it harder for family holdings to be handed down the generations.

His comments come as the legal community awaits a critical Supreme Court ruling on whether so-called ‘pre-nups’ have standing in English law and, if so, how much.

The case involves heiress Katrin Radmacher, who sat down with her future husband three months before their wedding in London in 1998 and got him to sign a pre-nuptial agreement. She believed she was safeguarding the £100m she was due to inherit from her father, a paper industry magnate.

Such a contract would be watertight in her native Germany – and in France, her then fiancé’s birthplace.

However, after spending most of her 12-year marriage to estranged husband Nicolas Granatino in the UK the test case will determine whether the pre-nup is legally enforceable in Britain.

What the Court’s nine judges decide will have far-reaching implications for other feuding couples and will be seen as the ultimate test of whether the agreements are enforceable in English law.

Although both parties are foreign nationals, the case is being contested in London because that is where the couple spent most of their relationship and where their divorce was filed.

Mr Tougher said: “Pre-nuptial agreements are red hot at the moment. They have not been recognised in English law, are not binding and, some would say, are not worth the paper they are written on.

“They are something the courts could have regard to and are probably better than nothing but that’s about it. Reaching agreement on such matters even before the couple have exchanged vows has been frowned on here because of the implication for the marriage.”
 
Depending on the ruling, England could well be brought into line with the United States and many other European countries.

Mr Tougher said the family farm issue and the threat from divorce had been a major concern at a series of MFG farming seminars the firm had recently conducted.

He said the issue could be addressed through the use of trusts but, if confirmed by the Supreme Court, pre-nups could be another option.

“The case will decide whether pre-nups have any credibility and, if so, how much. The farming community are closely awaiting the outcome and its implications in terms of holdings being passed down the generations,” he added.

MFG Solicitors has offices in Halesowen, Telford, Worcester, Bromsgrove, Kidderminster, Cleobury Mortimer and Oswestry.