Family Life

Family relationships are integral to most businesses but in particular farming enterprises – they are the backbone to the successful running of a company or partnership.

If there is any change to those relationships, whether that is between those working directly in the business or wider family relationships the impact can be significant.   One such change is in marital relations – whether good news, such as an engagement or not so good news, a separation.  In all circumstances there are steps you can take to protect the business and the individuals from the impact of such changes.

Partnership Agreement/ Partnership Property - a partnership agreement is always a good idea, whether from a business perspective or from a relationship perspective.   Often farming partnerships will have been started many years ago and the makeup of the partnership will have changed over the years.  If one partner separates, their interest in the partnership will be scrutinised and valued.   Having a partnership agreement in these scenarios is essential as it sets out clearly what interest each partner has and what property is partnership property or what may belong to individuals outside the partnership.  This is particularly important, if for example property may have been noted in the partnership accounts for years (often for bank borrowing purposes) but actually is owned outside the partnership.  All the partners may understand this, but a spouse may never have understood this or has made certain assumptions which can result in difficult and expensive litigation trying to unravel the situation.  A partnership agreement or at the very least a note in the accounts will make it clear to everyone exactly what interest each partner holds.

Shareholders Agreement – similar to a partnership agreement, it is always a good idea to have a Shareholders Agreement which can look at what may happen in a shareholder’s personal circumstances were to change.

Family or Company Constitution – although not that common and not legally binding, they are often a good idea as they set out certain principles/expectations for family members, where there is a business which has been passed through generations.  They then become the backbone for change in families and the starting point for difficult conversations when family life changes.

Cohabitation Agreements – if you are moving into a home together this type of agreement can document how you regulate your finances when living together and what you would like to happen if you separate.  It is also important as they make a clear statement as to the ownership of the property you live in and what if anything could change that ownership whilst you live together.

Pre-Nuptial Agreements – this agreement sets out what a couple would want to happen regarding their finances if they were to separate.  Whilst it may not be first in everyone’s minds when wedding planning, they are important particularly if you have significant wealth which as been built up via sole endeavours prior to the marriage which is often the case for second marriages or if pre acquired wealth has come from inheritance/family gifts through no effort of the persons getting married and protection is needed for future generations.  Such agreements can usually protect such assets provided they meet certain criteria, meet parties needs and are fair.  It is important to get advice early if you are in this situation.

Separation Agreements – these are useful if you are separating but don’t wish to divorce straight away but would like to sort out your finances or you are not married and separate and would like a clear document setting out the terms you have agreed after separation.

Will/ Powers of Attorney – it cannot be emphasised enough; how important it is to have a Will and to take Estate planning advice.  Not only does it give you peace of mind, it will also help your family manage life after your death or incapacity more easily. 

It is important to address these potential scenarios in advance, as whilst the hope is that these documents will never be needed, they provide clarity to all concerned and will make things easier and more efficient to resolve when the family situation may change.  At Rollits our lawyers work together across departments to make sure all aspects family life is covered.  In the first instance please contact, Alison Benson, Partner in the Family Team on 01482 337363 or moc.s1721986109tillo1721986109r@nos1721986109neb.n1721986109osila1721986109.