Pre-nup bid to avoid land battles
Partnership law raises ownership worries for unmarried farming couples
Published 15/02/2011 | 05:00
PRENUPTIAL agreements are likely to become more common in the farming community in order to avoid messy battles over who ends up owning land and other assets after one partner dies.
This is because the Civil Partnership Act, a new law that came into force last month, means farmers who are in a relationship but are not married could end up losing land and assets.
A "pre-nup" means contracting out of the new act by agreeing how assets will be divided up if the farmer and his partner split up, or the farmer dies.
Tax adviser Sonia McEntee of Astons tax and legal consultancy said the new legislation had raised concerns that economic rights were now being conferred on the partners of farmers who were not married.
She said a partner living with an unmarried farmer could end up owning part of a farm.
"If an unmarried farmer has a child with his partner, and has lived with his partner for more than two years, then the partner could be considered to be dependent and the courts are empowered to make wide-ranging orders," she said.
Among the powers of the court are those related to property and pension matters, maintenance orders and orders in respect of the deceased's estate.
The new act could also mean a messy tax bill for a former co-habiting partner or the couple's inheriting children.
Ms McEntee added: "Not only will this cause distress for the farming family, but the co-habiting partner or offspring may not be in a position to meet tax liabilities, meaning that the sale of the farm of part of it would be inevitable."
Cohabiting couples are the fastest-growing family unit. In 1996 there were 31,300 couples living together, but the last census, in 2006, indicated that there are now 121,800 cohabiting couples -- or one in every 12 family units.
Ms McEntee said that although prenuptial agreements were not recognised in Irish courts for married couples, the concept would work for unmarried couples where there were succession rights.
A spokesman for the Irish Farmers' Association (IFA) said it would be seeking an early meeting with the next justice minister to discuss the granting of legal status to prenuptial agreements.
In 2007, a study group recommended that legal status should be granted to prenuptial agreements.
As it stands, it is up to individual judges to assess the merits of any agreement, the IFA said.
"We would advise any farmers thinking about setting up a prenuptial agreement to seek the advice of their solicitor and accountant," the farmers' lobby group added.