When should I think about getting a pre-nup?
The date for the big day is set, the Pinterest board is filled with beautiful ideas and the arguments about who is and isn’t on the guest list are now into double figures There’s one outstanding issue which needs to be addressed; the prenuptial agreement. Many couples don’t know whether they need them at all, or if they do, when then should think about putting one in place.
What is a pre-nup?
Prenuptial agreements are contracts made prior to marriage between spouses, which set out how the parties would like assets (particularly non-matrimonial assets which the parties acquired before they had even met) to be divided in the event of a separation in the future. Such contracts were once void and the English courts dealing with divorce would not enforce their terms until relatively recently. However, the laws surrounding prenuptial agreements have now developed and many couples are putting them in place in order to protect those assets, so far as they can.
Should I make one?
There are a number of reasons why parties may want to enter into a prenuptial agreement. One example is where there is a family business or asset which has been passed down through generations and needs to be protected, or in the event of a second marriage where the parties want to protect the interests of their children from the first marriage. One of the most common reasons we see is where a parent has gifted a sum of money to their child (by way of early inheritance), for example to purchase a property, and the child wants to ensure that this money would not be considered part of the ‘matrimonial pot’ if they were to get divorced in the future.
Some people still have reservations about prenuptial agreements, but they need not be the contentious issue that the films make them out to be. Pre-nups are a very effective way of formally agreeing, in writing, the intentions for certain assets from the outset. In effect, they are an insurance document that will come in useful in the event that the marriage comes to an end.
Drafted properly, they are also a good way for a couple to retain as much control over how their assets are divided on divorce, instead of leaving this up to lawyers or the courts. On divorce, many clients are shocked to find out that assets they had both agreed would be “ring-fenced out” of the matrimonial pot are in fact not, when a simple pre-nuptial agreement would have assisted them in proving their clear intention to keep those assets outside the matrimonial pot.
Are they legally binding?
It is worth noting that the law in England and Wales at this present time does not allow for a prenuptial agreement to ‘oust the jurisdiction of the Court’. In other words – the prenuptial agreement is one factor which the courts will consider when deciding whether or not a financial order on divorce is fair, but not the only factor they will consider. This means that if parties do enter into prenuptial agreements but their circumstances change significantly, the Courts still have the power to ignore the prenuptial agreement to reach a ‘fair’ separation of assets on divorce.
When should I get a prenuptial Agreement?
The issue of when is important, because it is likely that the Court will consider a ‘late’ pre-nup (i.e. less than 28 days before a wedding) should hold less weight. We therefore strongly recommend starting the process at least 6-12 months before the date of the wedding, so that a final document can be signed in good time. Both parties will need to obtain independent legal advice on the document, so leaving it to last minute is not a good idea!
What about a post-nuptial agreement?
A post-nuptial agreement is similar to a pre-nuptial agreement in that it is a contract written between parties to a marriage which set out how assets should be divided on separation. The difference is that post-nuptial agreements are entered into after the wedding has taken place.
A post-nuptial agreement used to be considered ‘safer’ than pre-nuptial agreements, because pre-nuptial agreements are seen as the price the party in the ‘weaker’ financial position pays for the wedding to go ahead, and therefore are made at a time when the parties are more vulnerable or under more pressure. A post-nuptial agreement could have the same effect as the pre-nuptial agreement as outlined above.
An early pre-nuptial agreement followed by a post-nuptial agreement confirming the parties’ position is arguably the strongest way to show the Court on separation that there is clear intention if the relationship breaks down and the assets need to be divided.
What should I do next?
It is important to remember that as the law currently stands, there is no way a pre-nuptial or post-nuptial agreement can wholly oust the jurisdiction of the Court, and therefore by its very nature, a pre or post-nuptial agreement is a ‘risk’. It is far more risky however to have nothing in writing.
If you or a family member are considering a pre or post-nuptial agreement and would like some advice on whether or not you should put one in place, please contact the secretary for the family department to arrange a consultation with one of our family law specialists for half an hour at a fixed fee of £125 plus VAT, or an hour at a fixed fee of £200 plus VAT