I had the opportunity to be interviewed by Chip Flory for AgriTalk earlier this month about how pre-nups can be used to help prevent the family farm from being divided in the event of a divorce. This interview can be heard here.
Today, around half of all marriages end in divorce. Prenuptial agreements (or “pre-nups”) typically specify how property will be divided in the event that a couple divorces, and what will and won’t be considered in such division. With a pre-nup in place, family farm interests can be deemed the “separate property” of the spouse who owned such farm interest before marriage, or who anticipates buying into or inheriting farm assets after the marriage. Pre-nups also typically waive a surviving spouse’s rights to elect against the Will or otherwise inherit family farm assets upon death, giving the farm spouse flexibility to utilize trusts as a part of the estate plan, instead of outright distribution of assets to a spouse, which can be at risk of the spouse remarries.
Pre-nups must comply with certain conditions under each state’s specific laws in order to be valid. As an example, adequate disclosure of the value of the farm interests must be made to the spouse giving up a potential interest in the farm, and such spouse must have sufficient time and independent legal advice to properly consider this decision.
I’ll be speaking about pre-nups and other estate planning matters at the upcoming Top Producer Summit being held at the Hilton Chicago Hotel on January 27-30, 2020. I would encourage you to attend if you are able to do so, and join me in learning about topics such as grain marketing, risk management, technology trends, collaborative farming from a number of leading speakers.