Pre-nuptial agreements
At Ansham White Solicitors, we regularly prepare and advise our clients on the benefits and disadvantages of entering into a pre-nuptial agreement and its enforceability in the UK and internationally.
A pre-nuptial agreement (or ‘prenup’) in the UK is a legal document drawn up between a couple before their marriage to outline how each of their assets will be divided between them in the event of a divorce.
Assets including property, debts and income are usually covered in a typical prenuptial agreement to help couples avoid any financial surprises if the relationship were to break down in the future.
Prenuptial agreements are more likely to be put in place when one partner already has, or is likely to acquire, more assets than the other. For example, those with a large inheritance, landowners, business owners or those entering into a second marriage or partnership may look to get one.
What is the purpose of a prenuptial agreement?
The key purpose of a prenuptial agreement is to provide clarity for couples around how their assets will be divided in the event of a relationship breakdown and the exact details that vary depending on the case.
Typical prenuptial agreement terms cover:
- Protecting a child’s inheritance or specific assets or an individual
- Giving you both a say in how assets will be split if you decide to divorce
- Allowing one partner to retain full control of business ownership/ assets
- Protecting inherited money, assets or savings particularly from high value estates
- Protecting you from your partner’s debt
Therefore, a prenuptial agreements purpose is to set out what should happen in respect of the finances, living arrangements and perhaps the arrangements for the children in the event that the parties decide to separate and end their marriage/civil partnership. The equivalent agreement for those entering into a civil partnership is called a pre-registration agreement.
The aim of the agreement is to safeguard the interests of both parties and limit their exposure to financial risk in the event that a marriage/civil partnership ends. This is achieved by providing a degree of certainty in advance and avoiding potentially expensive litigation. Therefore, a prenup is sometimes viewed as a form of insurance policy against litigation which can be costly.
Are pre-nuptial agreements binding?
At present, whether a pre-nuptial agreement will be binding will be dependent on a number of factors. Where the prenup is executed properly, you can expect the agreement to be fully considered and its terms upheld.
Since the landmark Supreme Court decision in Radmacher v Granatino 2010 [2010] UKSC 42 the use of prenuptial agreements across the UK has grown rapidly.
In Radmacher the judge held:
“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”.
In order to persuade the court to uphold the agreement, the following factors should be dealt with:-
1.The Agreement must enable the parties and children to meet their needs and it must be fair.
This is arguably the most important clause. If the agreement does not enable the parties and children to meet their needs following a divorce, then the court is highly unlikely to uphold the agreement, even if all the other formalities have been met.
2. Parties must sign of their own free will.
The parties must enter into the agreement of their own free will and there must not be any undue influence or duress to sign the document.
Along with there being no duress, it is also essential that both parties have sufficient time to consider the terms of the document. A pre-nuptial agreement should be signed at least 28 days prior to the wedding. If you are contemplating a prenuptial agreement, it is advisable to contact us at least 3 months before the wedding date.
3. Financial disclosure.
Both parties will need to provide full disclosure of all of their financial circumstances before the agreement is signed.
4. Legal Advice.
Whilst this is not mandatory, it is highly advisable that both parties should take legal advice at the time agreement is drafted and sign a declaration confirming that they fully understand the document and its implications.
5. Contractual validity.
The agreement must be capable of being enforced as a contract.
6. Execution
The agreement must be executed as a Deed. The law now recognises a well drafted pre-nuptial agreement. Our specialist solicitors can draft a pre-nuptial agreement for you.
Pre-nuptial agreements are often persuasive and therefore binding unless there is a good reason for them to be void or unenforceable because, for example, the agreement restricts a person’s right to apply to the Court because there has been misrepresentation or undue influence.
Should I have a pre-nuptial agreement?
You should consider entering into a pre-nuptial agreement if you fall into any of the following categories:
- You each have properties and/or other assets which you wish to protect;
- You have significant assets such as a home, stock or retirement funds;
- You own all or part of a business;
- You may be receiving an inheritance;
- You have children and/or grandchildren from a previous marriage;
- One of you is much wealthier than the other;
- One of you will be supporting the other through higher education;
- You have loved ones who will need to be taken care of, such as elderly parents; or
- You have or are pursuing a degree or career in a potentially lucrative profession.
Even if you do not need a prenup at this stage, it can be useful to discuss the possibility with your partner.
Do I have to use a solicitor to draw up a pre-nuptial agreement?
Technically anyone can draw up a prenup, but we recommend that you seek legal advice from our family law specialists. English Courts are unlikely to pass a favourable judgment in the event of a makeshift agreement. The cost of consulting a solicitor is inconsequential compared with the financial protection you will acquire from a properly drawn up agreement after consultation with one of our solicitors. It is not unheard of that some individuals have lost up to 70% of their personal wealth as a result of a haphazardly self-written agreement.
Often, we act for couples cross jurisdiction. In these circumstances our immigration department can also assist in helping obtain the necessary visa where the intention is that the couple will live in England and Wales after the ceremony.
Please contact us today for a free no obligation telephone discussion by calling either our North Harrow office or City of London office. We look forward to hearing from you.