What is a pre-nuptial agreement?
A pre-nuptial agreement is a legal document between couples that sets out what will happen to their finances and assets in the event that they divorce. A pre-nuptial agreement allows parties to reach an agreement before marrying about how they wish to divide their assets should the relationship break down in the future.
If you are about to marry, it is beneficial to consider having a pre-nuptial agreement drawn up to show what you intend to happen to your money and property upon separation. Although discussing entering into a pre-nuptial agreement with your partner may seem like an uncomfortable conversation to have, obtaining a pre-nuptial agreement makes complete financial sense and can provide you both with a degree of reassurance in protecting your assets.
The law on pre-nuptial agreements
In the landmark case of Radmacher v Granatino, the courts ruled that a pre-nuptial agreement should be upheld unless one partner could show why is should not be. Following the decision of the Supreme Court in Radmacher v Granatino, the courts will uphold a pre-nuptial agreement that is freely entered into by both parties with a full appreciation of its implications, unless it would not be fair to uphold the agreement bearing in mind the circumstances at the time of divorce.
Why enter into a pre-nuptial agreement?
It is beneficial for you and your partner to be as organised as possible with your finances. Entering into a prenuptial agreement does not mean you are more likely to get divorced. It is a smart decision for both of you to ensure that you have a plan in place in the event that you decide to separate.
Having a pre-nuptial agreement in place allows you to protect any money or assets you have at present or may receive during the marriage. This can include any inherited money or assets. Additionally, it is a good idea to discuss with a solicitor what you wish to happen in the event of the marriage breaking down. This is considerably important if you have suffered any financial unfairness in a previous marriage.
If either party has a business they own, they may wish to ensure that, in the event of the marriage ending, they are able to retain full control of the business without any issues arising.
You may also have concerns if your partner has accumulated any debts or may possibly accumulate debt during the marriage. A pre-nuptial agreement can address this issue to protect you from your partners debts.
Furthermore, if you have a pre-nuptial agreement in place, this is likely to save you time and money in the divorce process as you will already have a plan in place setting out how your assets will be divided up. It will help you avoid a lengthy and acrimonious divorce if your marriage does break down.
Are prenuptial agreements legally binding?
At present, pre-nuptial agreements are not legally binding in the UK. However, the courts do give pre-nuptial agreements significant weight in proceedings and will largely seek to uphold them, providing the agreement was drawn up and signed with the correct considerations and precautions. More recently, pre-nuptial agreements have become far more desired due to the credible weight given to them by the courts. Pre-nuptial agreements are proof of a couple’s intentions for the division of assets in the event of divorce.
When will pre-nuptial agreements be enforced by the court?
A pre-nuptial agreement is more likely to be considered valid by the courts when it is written up correctly and fairly. The courts are more likely to uphold a pre-nuptial agreement where:
- Both parties to the agreement received independent legal advice before entering into it
- Both parties gave full financial disclosure of their assets, liabilities, and debts
- The terms of the agreement are substantially fair
- The agreement was freely entered into and neither party felt pressurised by the other to enter into the agreement
What can pre-nuptial agreements include?
A pre-nuptial agreement should be drawn up at least 28 days before your date of marriage. The following can be included in your pre-nuptial agreement:
- What will happen to the family home in the event of divorce
- What will happen to money held by either party or in joint accounts
- What will happen if either party has debts
- Whether children from a previous marriage have a right to any property or assets
- What will happen to property that either of you bought into the marriage
- What will happen to any assets given to either party or inherited during the marriage
Your solicitor will be able to advise you as to what types of provisions are likely to be enforceable.
Can you get a pre-nuptial agreement after getting married?
Pre-nuptial agreements must be signed before the marriage takes place. However, if you are married and decide that you wish to obtain protection similar to that offered by a pre-nuptial agreement, you can have a post-nuptial agreement drawn up.
Having a pre-nuptial agreement in place is a transparent and open opportunity for both partners in the relationship to enter into the marriage with full awareness of each other’s financial position. If you wish to have a pre-nuptial agreement drawn up, our family department can help you.