We've all heard of a prenup: the short-form name for the divisive prenuptial agreement contract.
If you are fortunate enough to be living, as some might say, 'how the other half' lives, we would recommend that you consider putting a prenup in place before getting married.
What is a Prenup?
A prenup is an agreement that makes provisions for the assets in the case that a couple splits. This could include provisions for any property or income. This is ideal if one party has significantly more wealth than the other.
Whilst prenuptial agreements are not formally binding in England and Wales, they are still very beneficial.
At present, the enforceability of a prenuptial agreement will depend on the court's view of its fairness.
If the court conclude that it is unfair to hold a party to the terms of a prenup, then the court has the discretion to make financial orders.
We see this in the case of Radmacher v Granatino 2010, where the courts stated:
"The Court should give effect to the nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement."
Based on the above judgment we can see that having such an agreement in place allows the court to make inferences as to what the parties intentions were, which can be advantageous in avoiding situations where one party appears to have taken advantage of the finances of the other. For this reason, prenuptial agreements are particularly ideal for preserving family wealth.
The law relating to prenuptial agreements is heavily based on case law; we can see from previous cases a pattern forming. This being that the court will usually adhere to the terms of the prenup except where they query the validity and fairness of the prenuptial agreement.
How do you ensure your prenuptial agreement is valid and will be enforced by the courts?
Disclosing all assets.
Both parties must provide full and frank financial disclosure to ensure that the agreement covers all assets. Failure to provide a complete summary of finances could lead to the courts concluding that one party is misleading the other, thus the agreement falling short of what the courts would expect.
Independent legal advice.
Like with all agreements, before signing your name on the dotted line you must ensure that you know exactly what you are agreeing to. Therefore, the courts must be satisfied that both parties obtained independent legal advice before agreeing.
There must be no duress.
Both parties must have agreed by their own free will; there must be no cohesion or forcibility. Should the courts determine that a party was pressured into signing a prenuptial agreement then the agreement would be void.
A balanced and fair prenup.
The courts have the discretion to depart from your prenuptial agreement should they feel that the terms of the agreement are unfair. This is another aspect of prenuptial agreements where obtaining independent legal advice is invaluable. Therefore, the agreement should consider the protection of one's assets reasonably and logically to avoid the courts departing from it and making provisions for financial orders.
Prenups should not be rushed.
Make sure that you leave enough time for the signing of the agreement; we advise at least 28 days before entering the marriage.
When it comes to prenuptial agreements, here at Specters, we have a wealth of knowledge. We offer a fixed fee service for prenups, and we are more than happy to help you protect your assets in a way that is fair for both parties.