Pre-Nuptial Agreements: What You Need to Know
Why consider a prenuptial agreement?
There are several reasons for entering into a prenup.
- One party’s pre-marital assets far exceed those of the other party.
- To protect the inheritance of the children of one party.
- To restrict one party’s liability for the debts of the other party. (Note that this requires a correctly drafted debt clause.)
- It would be difficult or impossible to split the assets brought to the marriage in a 50-50 division.
- To safeguard and ring-fence the expected future high earnings of one party.
- To preserve the pre-existing inheritance of one party (such as a property or business).
- To ensure that one party is able to retain control of their business after any divorce.
- In order for the parties to retain a greater say over the financial settlement in any legal proceedings that may result from a subsequent marriage breakdown.
While the precise reasons behind each prenuptial agreement will be unique to that couple’s circumstances, it is essential that neither party is coerced into entering into a prenup.
How to ensure a prenuptial agreement is a legally binding document
The most important point to remember is to take legal advice. This is because a prenup is not valid if it has not been drawn up by a qualified solicitor. In addition:
- Each party must take independent legal advice. This helps remove the risk of coercion and any potential conflict of interest.
- Each solicitor has a duty to confirm their client entered into the agreement willingly and freely.
- Both parties must disclose all their assets and property. This includes anything held outside the UK.
- The agreement must be signed no less than 21 days prior to the parties’ marriage.
When might a court not uphold a prenuptial agreement?
Courts are likely not to uphold a prenup if the couple’s circumstances have changed radically since they entered into the agreement. Most commonly this is because they have had children, and the prenup does not adequately protect the rights and interests of those children. However, other factors, such as one party having given up their career to support their spouse may also be relevant.
How can we help?
The experienced family and matrimonial team at Clifford Johnston & Co would be pleased to talk to you about what a prenuptial agreementinvolves in order to help you decide whether entering into one is the right approach for you.