Congratulations! You’re engaged. You’re now looking at setting the date, booking the venue and writing the guest list; but have you considered a pre-nuptial agreement? Or do you think that’s only for the very wealthy?
With the average age for first marriages now well into our 30s and the fact that second marriages are increasing year on year, people are thinking more about the need to protect the assets which they have already accumulated, in the event of a separation.
What is a prenuptial agreement?
A ‘pre-nup’ is an agreement entered into by a couple prior to their marriage or civil partnership. It sets out who owns what and outlines what would happens to their assets and income if their relationship breaks down.
Who should get a prenup?
You should think about setting up a prenup if you:
- Have assets that you would not want to share if the relationship broke down
- Have children from an earlier relationship and want to protect their inheritance or keep specific assets for them
- Have your own business, or perhaps a family farm, which you want to retain control of
- Want to safeguard money or assets that you are expecting to receive in a future inheritance
- One of you has debts and you would like a clause acknowledging that those debts are nothing to do with the other partner
Relationship breakdown is never easy. Emotions can run high and it can be difficult to think about financial matters.
If an agreement cannot be reached and Court proceedings are necessary this can be very expensive and stressful. The UK court has a wide discretion when dividing assets and this can result in uncertainty for all. By entering into a properly drafted prenuptial agreement you can alleviate some of that uncertainty and stress as you will already have agreed how to divide your assets in the unfortunate event of the relationship breaking down.
Are prenups binding in the UK?
Currently, in England and Wales prenups are not 100% legally binding. The Court will always retain jurisdiction. But, if a prenuptial agreement is properly entered into then it will carry significant weight in any subsequent court proceedings.
What do we need to do to enter into a prenup?
It is important that both people receive proper advice and the following formalities are adhered to:
1. Both people must enter into the agreement of their own free will and without any duress, influence or pressure.
2. Both people must provide full and frank financial disclosure to each other.
3. Both people must obtain independent legal advice from separate solicitors before entering into the agreement.
4. The agreement should be fair and reasonable to each party. (It is prudent to specify review dates for key events in the future, such as the birth of a child or say in 5, 10 or 20 years’ time to ensure the agreement remains fair and reasonable)
5. The agreement should be finalised no later than one month prior to the date of the marriage.
6. Each person should intend that the agreement determines the outcome of their financial arrangements in the event of divorce.
All of these formalities are crucial – if they are not complied with then a Court may decide to ignore the prenuptial agreement. Prenups are not for everybody but they are certainly not just for the rich and famous anymore.
If you are looking for further advice about prenuptial agreements please contact Kimberley Davies on 01202 338569 or at Kimberley.davies@trethowans.com
Trethowans – Law as it should be
