Pre-Nuptial Agreements – Are they only for the wealthy?

What is a Pre-Nuptial Agreement?

A Pre-Nuptial agreement is a document which is prepared between two parties prior to their marriage, outlining how their assets should be distributed in the unfortunate event that their marriage breaks down.

Why do I need a Pre-Nuptial Agreement?

Once you are married, any assets you respectively own may be considered matrimonial assets – this is regardless of whether the assets are held in your joint and/or sole names. If this is the case, they will be included within the matrimonial pot and shared between you and your spouse if you were to divorce. A pre-nuptial agreement, however, enables each spouse to ‘ring-fence’ certain assets in the event of a marriage breakdown and also make plans for their financial future.

It is a common misconception that a pre-nuptial agreement is only for the rich and famous. Pre-nuptial agreements are increasingly popular and can in fact, be used by anyone who wishes to protect their pre-marital (or expected) wealth. For many parties, pre-nuptial agreements are considered as an essential step as part of the pre-wedding planning and budget.

Some reasons include but not limited to: –

1. There is an existing disparity in wealth between you and your partner
2. You want to protect future earnings
3. You have a business to protect
4. You have an inheritance to protect
5. You both want to decrease potential Divorce Conflict if the marriage should breakdown
6. You want to protect yourself from the other spouses’ debt
7. You have a child from a previous marriage or relationship and wish to protect assets for the purposes of inheritance planning
8. You want financial security for the future

What can I include/ Not-Include in a Pre-Nuptial Agreement?

It is important to note that a pre-nuptial agreement cannot be allowed to prejudice the reasonable requirements of any children of the family. Your Solicitor will advise upon the fairness of any proposed agreement and the best way to secure your desired outcome.

Is a Pre-nuptial Agreement Legally Binding?

Whilst a pre-nuptial agreement under UK Law is not automatically legally binding, it will be upheld by the court providing it meets the following qualifying criteria:

1. It must be entered into within 12 months of the proposed date of marriage and no less than 28 days beforehand;
2. Both parties must have independent legal advice before entering into it;
3. Full financial disclosure should be exchanged between the parties prior to entering into the agreement;
4. The terms of the agreement must be substantially fair;
5. Neither party must have been placed under duress (pressure) to enter into the agreement;
6. There must be no fraud or misrepresentation by a party in relation to the agreement; and
7. Legal contractual requirements must be followed when the agreement was entered into.

Thereafter, the agreement should be subject to regular review by the parties to ensure that the terms reflect any changes to the parties’ circumstances and their ongoing intentions/financial obligations towards one another.

If you are planning a wedding or civil ceremony and would like more information, please do not hesitate to contact one of our specialist family lawyers on 01926 356000.