Laura Jones, Paralegal in the Family Department at Rowlinsons Solicitors discusses this question and how prenuptial agreements can be utilised.
We often hear about prenuptial agreements during high profile divorces, which could be a factor in why many believe that they are only for substantial wealth cases. However, that is not always correct and there are many other benefits to prenuptial agreements which we will discuss below.
A prenuptial agreement is a written agreement which is to be entered into before marriage, setting out a number of things in relation to financial matters. The main purpose of a prenuptial agreement is to provide separating couples with clarity on how their assets will be dealt with should the relationship break down. This will of course help to minimise any disagreements during the divorce process when discussing any financial settlement.
A prenuptial agreement can be used to deal with assets such as properties, savings held in the bank, inheritance, pensions, income and business interests. This can include assets that you currently have and also those that you are likely to have in the future, a key example being inheritance. Again, by deciding pre-marriage who is to retain what will assist in limiting any contention that may arise during separation and subsequently, divorce.
We appreciate that in the build up to any marriage, the last thing you want to be discussing is how you should split your assets should the marriage come to an end however, just because a prenuptial agreement is in place does not mean it will need to be used. It is an added layer of protection for both parties to ensure that they are in agreement with how assets should be dealt with, if the marriage was to breakdown.
Prenuptial agreements are not yet 100% legally binding in the UK however, following recent case law, the court will look to uphold the terms of the agreement, on the basis that certain criteria are met. The court will also have regard to what is fair when deciding whether to uphold any prenuptial agreement. Such criteria include that a prenuptial agreement must be contractually valid, freely entered into, signed by both parties and importantly, made at least 28 days before the date of any marriage. Therefore, time is of the essence if you are considering entering into a prenuptial agreement. Each party will also be required to seek independent legal advice on the terms of the prenuptial agreement and financial disclosure should also be exchanged before the prenuptial agreement is entered into. In the event that the 28 day deadline is proving problematic, a further option is to enter into an agreement after marriage and this is known as a post nuptial agreement.
Prenuptial and postnuptial agreements are becoming more common and ought to be considered by anyone who is contemplating marriage. It is sensible to consider protecting any assets brought into the marriage. If you require any assistance in relation to prenuptial or postnuptial agreements, then please do not hesitate to contact us on 01928 735 333 and we would be more than happy to assist.