Why everyone should have one
We recommend everyone entering into a prenuptial agreement before entering into a marriage or civil partnership. For more information on how to create the right agreement for you and your partner contact our Family and Relationships team today on 01284 767 766.
Should I get a prenuptial agreement?
If you are a fan of the Coen brothers, you may be familiar with the film “Intolerable Cruelty “. In this typically darkly comic film George Clooney and Catherine Zeta Jones go to battle over the terms of their prenuptial agreements. However, in the UK prenuptial agreements are not as binding as they are in Hollywood, nor are they exclusively for the very rich.
I’m not rich, so do I need one?
Prenuptial agreements are not just for the rich and we would recommend that anyone and everyone should have a prenuptial agreement before entering into a marriage or civil partnership. It may sound unromantic but there are 3 key reasons for a pre-nup:
- to set out how you will manage the finances during the marriage.
- to set out what will happen to the finances in the event of a divorce or separation.
- to protect any inherited wealth or property acquired by one of you before the marriage.
A Pre-Nup can therefore be helpful in any partnership, but there are some circumstances when a Pre-nup isn’t just helpful, it really should be seen as essential:
- When you have an interest in a family business.
- When you’re bringing assets to the marriage, whether by an inheritance or family gift etc.
- When this is your second marriage-particularly if you have children from the first marriage.
Communication is the key to any successful marriage. Sadly, it is often the case that failure to discuss financial issues can lead to the breakdown of the marriage. For any prenup to be effective there must be full “financial disclosure“. Both of you must give full details of their financial position to the other and being open and honest with each other at the start of the marriage, and being able to agree your own terms, can strengthen the relationship and improve communication.
Agreeing a prenup also gives you and your partner the opportunity to discuss how you will manage your finances during the marriage. Prenup‘s are often seen as favouring the wealthier spouse but they can provide certainty and help the financially weaker spouse to feel more secure.
Perhaps the main advantage of a prenup is that it allows you to protect an asset in the event of the breakdown of the marriage. By identifying assets as non-matrimonial they are effectively ring fenced. This could be inherited wealth, an interest in a family business or property owned prior to the marriage.
A properly drafted a prenup should enable you and your fiancé to protect your assets whilst ensuring that in the event of a divorce both of you are fairly treated.
But if they are not legally binding are they a waste of money?
Whilst pre-nup‘s aren’t binding on the courts in the event of a divorce the court will attach appropriate weight to them if they have been properly drawn up and they meet certain requirements:
- they must be freely entered into (any duress or undue influence will render the agreement void)
- The parties must have a full understanding of the implications of the agreement – which is why a full exchange of financial information is needed
- The terms of the agreement must be fair and address the needs of the parties at the time of the separation / divorce.
- The prenuptial agreement also needs to be in the form of a deed and each party must have taken independent legal advice.
If all these requirements are met the Court will uphold the Agreement.
So, it’s difficult to see why everyone doesn’t have one. They can strengthen a marriage and open up the lines of communication but, in the event of a breakdown can bring a degree of clarity and certainty and significantly reduce costs and acrimony.
Our Family and Relationships team are highly experienced in all relationship agreements and can advise you on how to create the best agreement for your relationship and financial situation bespoke to the needs of you and your spouse. For more information on prenuptial or other relationship agreements get in touch with our team today to arrange a consultation on 01284 767766.
© Atkins Dellow LLP 2021
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