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Why you should consider a prenup

Stephen Hunt - Law on the Web

  1. 08 April 2015
  2. Family
  3. 0 comments
Wedding

What are pre-nuptial agreements?

A pre-nuptial agreement is an agreement entered into by a couple before they get married which makes provisions for how the couple’s finances should be handled in the event that they divorce later down the line.

Although it is seen as far from a romantic undertaking, and nobody gets married with the expectation that it will end in divorce, more and more couples are drawing up a pre-nuptial agreement to avoid stress and save money if the worst does happen.

Are pre-nuptial agreements legally binding?

As of yet pre-nuptial agreements are not strictly legally binding in the UK, and they may not be enforced by the courts. The courts may in certain circumstances, however, give considerable weight to pre-nups when using its powers to distribute assets in a way which it sees as fair and equitable.

A key case for the status of pre-nuptial agreements in the UK was that of German heiress Katrin Radmacher and her ex-husband Nicolas Granatino. Granatino lost out on a large chunk of his divorce settlement on the strength of a pre-nuptial agreement that they had signed.

This case set a precedent for pre-nuptial agreements being legally enforceable in the UK. Courts are now likely to uphold a pre-nuptial agreement as long as it is fair and both parties entered into it freely and understood what they were signing up to.

To give a pre-nuptial agreement the best chance of being upheld by a court, there are certain steps that can be taken when composing it.

  • Both parties to the agreement need to take separate, independent legal advice so that they fully understand its implications.
  • Adequate time needs to be left between the signing of the pre-nuptial agreement and the marriage so that both parties can digest what the terms of the agreement mean and whether they are appropriate.
  • To ensure that the courts consider the agreement fair at the time of the marriage breakdown, it may need to be reviewed every so often in order to reflect changes of circumstances.

What are the benefits of pre-nups?

A couple, by signing a pre-nuptial agreement, can specify exactly how finances should be dealt with if they separate, rather than leaving this up to the courts.

If a pre-nuptial agreement can be enforced it can help to move proceedings along more quickly in the event of a split, at a time when nobody wants things to be dragged out.

In particular, pre-nups can be a useful means of protecting the wealth of one side of a couple, if they are considerably richer than the other, by stopping the courts from dividing assets up equally. Pre-nups are also useful for defining what is marital property and excluding any personal property that you may wish to keep separate from your partner from this.

Of course, the main argument against pre-nups is that they suggest mistrust of the other party, but having open discussions about your finances could put your relationship on a sounder footing and ensure there are no misunderstandings.

If you would like more information on getting married or pre-nuptial agreements, please visit our family law section.