Advice Centre

Pre-nuptial agreements are not merely for the wealthy. Whether you expect to inherit substantial assets in the future, or have family heirlooms you want to ensure remains within the family, everyone should consider entering into a pre-nuptial agreement.

No one enters a marriage or civil partnership with the expectation it will end, but if the worst happens, having an agreement in place helps to reduce the stress and anxiety surrounding a break-up. If you are wealthier than your partner, or your earnings are higher, you may want to maintain this if you decide to divorce. It is fairly commonplace for courts to divide assets on a 50/50 basis, and a pre-nuptial agreement increases the likelihood that you will retain more than 50% or more under the terms of the agreement.

Conversely, if you have less wealth than your partner, you will probably want to ensure your financial peace of mind if you divorce. This is particularly important if your non-financial contributions to the marriage or civil partnership, such as running the family home and looking after the children, may not otherwise be recognised.

An agreement could help you protect your assets where:

• You are remarrying and want to protect the settlements received from a previous marriage or civil partnership.
• You have dependents or children outside the marriage, and you want to protect specific assets for their benefit.
• You or your partner have debts or other liabilities that you don’t want to impose on the other.
• You have a business you want to ringfence from being considered as a matrimonial asset.
• You wish to safeguard particular family heirlooms or estate assets.
• You have wealth overseas you wish to protect.

What are the benefits of having a pre-nuptial agreement?

The main advantages of entering a pre-nuptial agreement include:

Transparency

Both parties can make it clear from the outset that there is specific property belonging to you that will not be shared if you divorce. This property is typically referred to as ‘non-matrimonial property’.

Certainty

By agreeing with your partner before you marry or enter a civil partnership how your finances will be divided should you divorce, you save each other the uncertainty that can come from arguing about your finances if you divorce.

Money saving

Whilst legal fees will be charged for the preparation, drafting and advice for a pre-nuptial agreement, it is likely to be more cost effective to negotiate than it will be to litigate the division of marital finances.

Protect assets

As discussed above, you can agree to ringfence certain property or assets. In these cases, a court will be less inclined to award a share of that property to the other party during divorce.

Minimises animosity on divorce

By setting out how assets should be divided at the beginning of your married life, it should, in theory, mean fewer arguments about your finances. It may also help maintain an amicable process during the divorce and afterwards, because both parties will know what they are getting.

Protects business partners

If you have a business partner, a pre-nuptial agreement can protect their interest. It can also help to prevent business disruption.

There are several requirements that must be met when entering into a pre-nuptial agreement. The court will determine whether both parties entered into the agreement of their own ‘free will’, and with no pressure from anyone else. It is also important to demonstrate that there was sufficient time for both parties to consider the terms of the agreement and obtain independent legal advice regarding potential legal implications.

What is needed for a pre-nuptial agreement?

In order for your pre-nuptial agreement to have the best chance of being upheld by a court, you should consider the following checklist:

• Both parties fully disclose all assets and property, details of which, ideally, should be annexed to the pre-nuptial agreement.
• Both parties should confirm in writing that they understand the terms of the pre-nuptial agreement, and they accept being bound by them.
• Each party must get independent legal advice.
• The agreement should be signed before the wedding, ideally, at least 21 days before the ceremony takes place.
• Neither party must have been placed under duress or undue influence and enter the agreement freely.
• The terms of the pre-nuptial agreement must be ‘reasonably fair’.

‘Fairness’ in this context may seem to oppose the purpose of an agreement which serves to protect someone’s pre-acquired wealth or assets. And, to date, there has been very little in the way of litigation that has challenged this concept. Generally, it is taken to mean that both parties to the relationship should be able to meet their own needs and that of any children.

Contact Our UK Family Law Solicitors based in Manchester, London and Birmingham

Discussing pre-nuptial agreements is an important conversation to have with your partner. Our team of Family Law experts know how difficult this conversation can be to have, and will be here to support you – even just through an informal chat.  To find out more, contact Iwona Durlak, Family Law Partner and Solicitor by calling 0330 107 0107 or email info@imd.co.uk.  Once we are contacted by you, one of our helpful team members will contact you. Please note we have a team of lawyers who speak many languages including English, Polish, Romanian, Russian and Lithuanian.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.