How A Prenuptial Agreement Can Protect the Family Farm

On Behalf of | Sep 29, 2023 | Family Law

Life for many Minnesota and Wisconsin residents revolves around the family farm. Some have been around for generations. What does this mean for you if you’re getting married? Two words: antenuptial agreement (sometimes called a prenuptial agreement).

If you have an ownership share in your family’s farm (even if you have no involvement in running it) or you’ll inherit all or part of it after your parents pass away, you’re likely already being encouraged by your family to get a prenup. This will help protect the farm (including the land, the properties on it and other assets like equipment) should the marriage end in divorce.

If your family’s farm has been very successful, there may be a trust set up in your name, and you may have considerable assets of your own. A well-crafted prenup allows both spouses-to-be to protect the assets they bring into the marriage from divisions according to state law if the marriage doesn’t last “’til death do us part.” Minnesota and Wisconsin law handle property division differently in divorce, but a prenup in either state can help you set your own financial terms.

A prenup that’s not fair can be ruled invalid

When developing a prenup, both parties must be honest about all their assets. Not doing so can provide grounds to challenge the agreement if it is ever put into action. 

A valid prenup also requires the informed agreement of both parties. No one (like concerned parents) can pressure, threaten or bribe someone into signing a prenup. You also can’t spring it on the other person just before the wedding when they don’t have time to get their own legal representation (which both parties need to have) and thoroughly review and negotiate the terms. 

Further, a prenup needs to be fair to both parties. Otherwise, it may be deemed “unconscionable.” That essentially means it’s extremely biased toward one of them. For example, you can seek to retain your full share of the farm should you divorce. However, you’ll likely need to agree to give your spouse something else.

Even though prenups have become increasingly common, many people think of them as “bad luck” or a self-fulfilling prophecy, and that by having one the couple is already anticipating divorce. This is a misapprehension.

Prenups are nothing more than an insurance policy. You have insurance on your farm, home and other property in case of fire or other disaster – disasters that, in all likelihood, won’t ever occur. 

The same is true for a prenuptial agreement.  It is wiser to prepare for a disastrous outcome that is unlikely to occur, than to suffer the financial consequences of being caught unprepared.