Prenuptial Agreements
A prenuptial agreement (often known as a ‘prenup’) is a legal document set up before a marriage which sets out how a couple’s assets and finances are to be distributed in the event of a divorce. With over 100,000 divorces in the United Kingdom in 2019 these agreements have become increasingly popular. Despite the common misconception that prenuptial agreements are unromantic and show a lack of trust in the relationship many married couples have successful marriages with the peace of mind that their finances are protected.
In the event of a marriage breakdown, without a prenuptial agreement all assets will be classed as matrimonial assets and distributed between both parties, meaning both parties will have a claim on each other’s assets, including any pensions accrued during the marriage. Often this can lead to a hostility between parties when trying to come to reach financial settlement, this can be avoided with a prenuptial agreement.
A prenuptial agreement may not be suited for everyone but there are circumstances where they can be of particular interest:
Where one party has or is likely to have increasingly more assets than the other. For example, they may have a large inheritance, be a landowner or own a business.
Where one or both parties have children from another relationship and want to ensure certain assets are held for them.
Where one party has outstanding debt that the other does not want to be liable for, in which case a ‘debt clause’ can be included in the agreement.
You are marrying later in life and want to ensure the assets you have accrued before your marriage are protected.
While a prenuptial agreement is not automatically legally binding there is sufficient precedence that suggests the courts will uphold an agreement if it meets the following criteria as set out by the Supreme Court:
Both parties must have received independent legal advice and understand the implications of the agreement.
The agreement must be fair and reasonable.
It must be contractually valid, meaning both parties must have entered the agreement freely and not under duress, pressure or rushed by their partner.
It should not prejudice any children or future children.
The agreement must have been made at least 28 days before the marriage.
Both parties must have received a full financial disclosure from each other, this includes any property, savings, investments and debt.
A prenuptial agreement will last for the entirety of your marriage, however, it should be reviewed often to ensure it still meets the above standard, especially if you have since had any children. You will also be able to make amendments to the agreement so long as the agreement still meets the correct standards and the amendments are signed and agreed by both parties.
If you require additional information or legal assistance, please do not hesitate to contact the Family Law Team at MJP Law on 01202 842929 or email info@mjplaw.co.uk
