At one time, pre-nuptial agreements were something that were deemed to be for the rich and famous, for celebrities and those with significant wealth. Today, however, they are a legal tool used by couples who wish to protect their assets, in the event of a separation at a later stage. This is more common in couples who are considering a second or subsequent marriage.
What is a prenuptial agreement?
A prenuptial agreement is a formal agreement put in place by a couple prior to marriage. The agreement outlines the ownership of assets (property, money, etc) that are brought into the marriage and specifies in the event of divorce or dissolution, how these assets would be divided.
Are prenuptial agreements legally binding in the UK?
Prenuptial agreements are not automatically legally binding in the UK; however, they do provide details as to the intentions of parties prior to the marriage. There are criteria that must be met prior to the marriage for the ‘Pre-nup’ to be considered by the courts as binding.
It is possible that if the terms of the prenuptial agreement are fair, taking into account the circumstances of both parties and any dependants, and were drafted and the agreement signed in sufficient time prior to marriage, and that full disclosure of each parties financial assets were disclosed to the other, and that both parties had the benefit of legal advice in relation thereto, that they could be upheld by the court.
Why should I get a prenuptial agreement?
Whilst prenuptial agreements aren’t suitable for all couples, it can provide peace of mind and reassurance in some instances.
In the following scenarios, prenuptial agreements may an appropriate consideration:
- If you have children or grandchildren from a previous relationship and would like to protect your plans for their inheritance
- If you are a business owner
- If your partner has a significant level of debt and you want to protect yourself from being liable for this debt
- If you have substantial wealth that you would wish to protect
How do I set up a prenuptial agreement?
In order to create a prenuptial agreement, it is essential that you seek legal advice from a solicitor in the first instance. – Each party to the agreement must have their own solicitor to avoid a conflict of interest.
The terms of a prenuptial agreement must be fair, consider the circumstances of each party and any foreseeable changes to current circumstances, for instance if one party is likely to take a career break to care for children.
Full financial disclosure must be provided by both parties and both parties must enter the agreement voluntarily, with full understanding of its terms and be in full agreement with said terms.
In order for the agreement to taken into consideration by the Courts, it is also necessary for the agreement to have been signed a minimum of 28 days prior to marriage
Can a prenuptial agreement be cancelled?
It is possible to include a clause within the original agreement that sets a time limit on the intended validity of the agreement. Equally, it may also be possible to subsequently agree that the terms of a prenuptial agreement can be terminated. However, this should be evidenced in writing, with both parties entering into such a subsequent agreement of their own free will and with the benefit of independent legal advice.
If you would like to speak to a member of the Family Law team regarding putting a prenuptial agreement in place or regarding an existing prenuptial agreement, please contact Kara Webster or Nicholas Clough on 0161 615 5554, by email to Kara.Webster@psg-law.co.uk or Nicholas.Clough@psg-law.co.uk or via the livechat tab.