What exactly is a pre-nuptial agreement?
A pre-nuptial agreement (commonly called a prenup) is entered into before the marriage or civil partnership. Its purpose is to set out what should happen in respect of the finances, living arrangements and perhaps the arrangements for the children in the event that the parties decide to separate and end their marriage/civil partnership. The aim is to safeguard the interests of both parties and limit their exposure to financial risk and stress in the event that a marriage/civil partnership ends by seeking to achieve a better degree of certainty in advance and avoiding potentially expensive litigation. A prenup can be viewed as a form of insurance against costly litigation.
Pre-nuptial agreements are becoming a common feature of modern marriages/civil partnerships. One no longer has to be a Rockefeller or Trump to want a pre-nuptial agreement. A person who has managed to save £20,000 may be more protective of their little nest egg than someone who has millions.
Are pre-nuptial agreements binding?
The law now recognises a well drafted pre-nuptial agreement. Our specialist solicitors can draft a pre-nuptial agreement for you.
Pre-nuptial agreements are binding unless there is a good reason for them to be void or unenforceable because, for example, the agreement restricts a person's right to apply to the Court because there has been misrepresentation or undue influence.
Therefore all pre-nuptial agreements will be binding on the parties subject to voidable or unenforceable provisions.
The English Supreme Court has recently said that:
"The Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement."
Such agreements need to be:
Should I have a pre-nuptial agreement?
freely entered into by both parties;
both parties need to be properly advised, or have had the opportunity to be properly advised;
understood in terms of their effect by both parties;
subject to full financial disclosure by both parties; and
if possible provide for future changes.
You should consider entering into a pre-nuptial agreement if you fall into any of the following categories:
You each have properties and/or other assets which you wish to protect;
You have significant assets such as a home, stock or retirement funds;
You own all or part of a business;
You may be receiving an inheritance;
You have children and/or grandchildren from a previous marriage;
One of you is much wealthier than the other;
One of you will be supporting the other through higher education;
You have loved ones who will need to be taken care of, such as elderly parents; or
You have or are pursuing a degree or career in a potentially lucrative profession.
Even if you do not need a prenup it can be useful to discuss the possibility with your partner because it is so important to plan for the future.
Do I have to use a solicitor to draw up a pre-nuptial agreement?
Technically anyone can draw up a prenup, but we recommend that you seek legal advice from our family law specialists. English Courts can be notoriously arbitrary in family law cases and are unlikely to pass a favourable judgment in the event of a makeshift agreement. The cost of consulting a solicitor is inconsequential compared with the financial protection you will acquire from a properly drawn up agreement after consultation with one of our solicitors. In some recent cases individuals have lost up to 65% of their personal wealth as a result of a haphazardly self-written agreement.
Please contact us today for a free no obligation telephone discussion by calling either our London
or High Wycombe
Our Family Law Team