Could a pre-nuptial agreement save the family farm?

Contrary to common misconceptions, pre- and post-nuptial agreements aren’t just for celebrities or very high-net-worth individuals. They’re essential, practical and forward-thinking tools for safeguarding wealth and assets, and they’re finding a new lease of life amongst farmers and rural business owners. Major changes to inheritance tax (IHT) were first announced at the UK’s October 2024 budget, particularly in relation to agricultural property relief (APR) and business property relief (BPR). This has been followed by further announcements at the end of 2025, which now mean from 6 April 2026, full 100% IHT will be restricted to the first £2.5million of combined agricultural and business property.   Any assets eligible for 100% APR and BPR thereafter will drop to 50% relief (an effective 20% IHT rate).

These changes to the IHT regime have prompted many farmers and business owners to accelerate plans to pass down land, property and family businesses to avoid these costs. While early gifting has its benefits, it can also pose significant risks – especially when transferring assets of substantial value to children. Divorce, financial mismanagement or new relationships can all threaten wealth that has taken generations to build.

So, what happens if a well-meaning farmer transfers ownership of land and business to their adult children who might later find themselves headed for a divorce? Well, the intention to keep the farm in the family and provide a multigenerational business could be in major jeopardy, unless significant legal protections have been put in place.

Nuptial agreements aren’t about expecting failure, they’re about preparing responsibility for the future. Reframing them as ‘insurance plans’ rather than ‘exit strategies’ is a good way to understand their true value. You don’t take out car insurance expecting an accident, but you’d never drive without it. In the same way, pre- and post-nuptial agreements aren’t entered into with the intent of a divorce. In uncertain times, they ensure stability, clarity and control.

Fully safeguarding a family farm or business requires well-rounded strategy including clearly set out agreements, wishes and values. Nuptial agreements don’t remove the courts’ discretion, but when combined with wills, shareholder agreements and family protocols, they provide a legal safety net to ensure wealth is passed down smoothly, in life or death. When tailored to work together, all these tools play a vital role in protecting assets, preserving family legacies and ensuring compliance with tax and legal obligations.

The benefits are clear, but putting nuptial agreements in place is easier said than done. Despite their importance, many people feel discomfort in discussing financial matters with a partner, or think pre-nuptial agreements are “unromantic” or “overly cautious”. This is especially true in rural communities where personal relationships and business are often deeply intertwined, and financial conversations can feel personal and challenging.

Reframing these agreements as a responsible succession plan can help break the stigma, and the earlier they’re talked about the better. With the right expertise and guidance, a well-written nuptial agreement freely entered into can be a vital tool to help couples maintain control, avoid long-term disputes and have peace of mind.

And if a pre-nuptial agreement isn’t put in place prior to marriage, it isn’t too late. We are seeing more married couples in farming and rural businesses enter into post-nuptial agreements to protect current and future wealth.

Nuptial agreements should not be thought of as out of reach in family farming and business succession. Just like writing a will, they can be an essential tool in maintaining control of family assets and managing intergenerational wealth.

As tax rules shift and more families look to pass down lifetime gifts to the next generation, they must not leave themselves at risk. It’s time to break the stigma and start treating pre- and post-nuptial agreements as a smart move to maintain control of the family business.

How we can help

If you have any questions relating to the issues raised here, please contact a member of the Anderson Strathern team or  Danielle Edgar directly.

Published in the Farming Scotland Magazine on 6 March 2026.