No one likes to think of their new relationship breaking down. Getting together is an exciting time and planning for divorce may seem unromantic or distasteful. However, an agreement which stipulates what should happen financially if your relationship ends can help avoid a messy and expensive dispute later on.
Couples planning to marry may enter into a Pre-Nuptial Agreement stating how their assets and income should be divided on divorce. While not currently binding on the courts, recent cases illustrate that a Pre-Nuptial Agreement is likely to be upheld provided the parties have entered into it freely, they fully appreciate its implications and its terms are fair and do not prejudice the reasonable needs of any children.
The courts still retain discretion to make financial orders on divorce but a Pre-Nuptial Agreement will be taken into account in all of the circumstances of the case and in the right case, will carry decisive weight when the court is determining the asset distribution.
It is far better for a couple to decide on what their financial settlement should be in the event of divorce and a Pre-Nuptial Agreement is the best tool available for this, provided they are willing to be realistic and fair. They will need to fully and frankly disclose their financial circumstances and each seek independent legal advice on the Agreement.
A Pre-Nuptial Agreement should be entered into at least 28 days before the wedding to avoid any claims that it may have been signed under duress.
Couples who are already married may enter into a Post-Nuptial Agreement which has the same effect.