Thursday, 19th February 2015
A Pre-nuptial or Premarital Agreement, commonly abbreviated to pre-nup or pre-nupt, is a written contract created prior to marriage, seeking to regulate the prospective spouses' financial liabilities and responsibilities towards each other in the event of their subsequent divorce or separation. With approximately 45% of marriages ending in divorce, Pre-nuptial Agreements are becoming increasingly popular.
WHAT DO PRE-NUPS COVER?
Although the contents of Pre-nuptial Agreements can vary widely, they frequently include provisions for the division of property and spousal support in the event of the breakup of a marriage.
They may also include terms for the forfeiture of assets as a result of divorce on the grounds of adultery.
WHY HAVE A PRE-NUPTIAL AGREEMENT?
Pre-nups provide a good starting point in the event of marriage breakdown, and can be very effective in cases where the marriage itself was short.
Pre-nuptial Agreements provide clear evidence of the assets that each spouse brought to the marriage, and how they wished to deal with those at the start.
Pre-nups can also assist couples who are marrying for a second time in protecting any settlement received from their first marriage. If there are children from a previous relationship, they may wish to ensure that any money or property that they have at the time of the marriage is preserved for said children.
For those who have inherited, or have assets that have been in their family for generations, a Pre-nuptial Agreement provides a way, potentially, to ring-fence inherited property in the event of a divorce or civil partnership dissolution.
IS A PRE-NUPTIAL AGREEMENT ENFORCEABLE IN THE UK?
Although currently unenforceable under English Law, where properly drafted by a specialist family solicitor a Pre-nuptial Agreement can be persuasive evidence to the court in setting out how a couple agreed, before they married, to divide their property, and this can have a significant impact on the outcome of a divorce case.
Following the case of the German heiress, Karen Radmacher, reported on October 20, 2010, which appeared to show that the British courts were willing to accept that "decisive weight" should be given to a Pre-nuptial Agreement in the UK, it looks more likely that an existing Pre-nuptial Agreement could become enforceable in England and Wales in the future.
Key points to help strengthen the case for your Pre-nuptial Agreement
- Both partners should take separate, independent legal advice before entering into an agreement so that they understand the agreement and are aware of its implications;
- Both parties should fully disclose all assets and financial circumstances, as failure to do so is likely to weaken the status of the agreements in the eyes of the courts;
- The meaning of the pre-nup agreement must be clear enough to be enforceable as a contract;
- It is recommended that the agreement is finalised as soon as possible and a minimum of 42 days before the wedding or civil partnership ceremony;
- No pressure should be put on either party as it is important that both parties willingly sign the pre-nuptial agreement;
- The agreement should set out what will happen to the assets that belonged to each partner before they married, as well as those accumulated during the marriage;
- The agreement should acknowledge the interests of any children or other dependents from a previous relationship; and
- Care needs to be taken in drafting your wills, to ensure that they do not conflict with any Pre-nuptial Agreement.