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Are prenups wise for farmers and ranchers?

When a couple goes into a marriage with property, assets or a business that they want to protect and/or children that they want to ensure are taken of, family law attorneys generally recommend getting a prenuptial agreement. Prenups are also becoming increasingly common when one of the spouses-to-be owns a farm or ranch.

Many farms and ranches, like businesses, have been in a family for years, if not generations. Farming and ranching are generally much more than a business. They are a way of life for these families. Therefore, it's understandable that families would want to protect their ownership of the land, animals and equipment should the couple divorce. However, legal and agricultural experts have varying opinions on prenups for farmers and ranchers.

Even if only one spouse owns the farm or ranch going into the marriage, it could be considered a marital asset to be split if the couple divorces, particularly if the costs of running the farm were paid from accounts belonging to both spouses. However, if a prenuptial agreement spells out that the farm or ranch belongs only to the spouse who came into the marriage with it, the other spouse might feel "emotionally disconnected" from the business, as one agriculture management consultant put it. This could hamper the success of their agricultural business, which generally requires hard work and dedication on everyone's part, over the long run.

However, a prenup, when properly drafted, can prevent legal conflicts over the disposition of the farming or ranching operation in a divorce. Many assets associated with an agricultural business can't be easily divided or liquidated to split between the spouses without jeopardizing the operation. Some legal experts recommend making the prenup part of the farm or ranch's risk management plan.

Each couple's situation is different, of course. Therefore, it's wise to seek the guidance of a family law attorney with experience handling prenups involving farms and ranches to determine the best course of action for you.

Source: Farm & Ranch Guide, "Prenuptial agreements have mixed benefits for farm couples," Michael Rosmann, PhD, accessed Jan. 06, 2016

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