Going into a marriage with a plan for how assets will be divided it if doesn’t work out does sound very unromantic. In the whirlwind of planning the big day, it might even feel a bit depressing. As if you are tempting fate planning for a breakup before even tying the knot.
In practice, working together to develop a prenuptial agreement is a pragmatic way to safeguard your assets before getting married. A prenup can create clarity and encourage openness and ensure there’s no grey areas before you do get married.
In previous years it was common to only hear about prenups in the news. They’re a common feature of celebrity and other high-profile divorces. But they’re not just for the rich and famous. Prenups are increasingly popular with younger couples of more moderate means.
It’s thought that around 25% of couples now have a prenup in place when they get married. This could be because people are getting married later in life – perhaps when they’re already established in their careers with savings and investments of their own – or because we’re generally becoming more financially aware as a society.
Attitudes are also shifting, with YouGov research confirming that around 42% of Britons now consider prenups to be a good idea, rising to 47% amongst younger generations.
Whatever the reason for considering a prenup, it’s an excellent way to protect each person’s individual assets and peace of mind.
What legal requirements must be met for a prenuptial agreement to be valid?
A prenup is a written agreement or contract between two people, created before they marry. It lists each person’s assets and outlines who gets what in the event of a divorce. In essence, it means that each person can ringfence their assets (including businesses and property) so they don’t become communal property and won’t be divided up between both partners in the event the marriage fails.
Although a prenup should be drafted by a family solicitor to ensure it is fair, reasonable and clear, they are not legally binding in the UK. They are increasingly considered by the courts in the event of a divorce, however. For a judge to deem the prenup enforceable, certain conditions do need to be met:
- The court must be satisfied that each person entered into the prenup freely and without duress
- The court is confident that both parties understood the terms of the prenup and its consequences when it was signed and had access to independent legal advice
- That each person honestly declared their assets, income and financial resources (such as any forthcoming inheritance) when drafting the prenup
- Holding both parties to the terms of the prenup won’t result in one person facing significant financial hardship
- That abiding by the terms of the prenup won’t have a negative impact on the welfare of any shared children
How far in advance of the wedding should a prenuptial agreement be signed?
For a prenup to be considered by the family court in the event of a divorce, the judge must be satisfied that the agreement wasn’t signed under duress. This means that there should be a decent interval between the signing of the prenup and the date of the wedding. As a rule of thumb, the prenuptial agreement should be signed at least 28 days in advance of getting married.
Having a prenup in place in advance of the wedding also ensures that there is time to seek legal advice, that both parties can make full and accurate disclosures and that there is opportunity for discussion.
Rushing to get a signed agreement completed because it’s been left too late to be given due consideration is never advisable. This is especially true when planning a wedding given the time pressures and stress both parties are likely to be experiencing in the run up to the big day.
What should be included in a prenuptial agreement?
The exact assets included in your prenuptial agreement will be particular to your personal circumstances. While your solicitor will be able to guide you, many prenuptial agreements will cover things like:
- Property: Property is a valuable asset and if you’re going into the marriage already owning property, this should be listed in your prenuptial agreement. You should also include property you’ve purchased but don’t live in, as well as any commercial property you own – for example, your business’ warehouse, office or other space.
It’s additionally a good idea to set out what will happen to the family home in the event of a divorce here, too.
- Debt: Financial problems can be a huge source of tension in a relationship. That’s only exacerbated if one person is entering the marriage with a significant amount of personal debt. While it may be an uncomfortable topic, including details of debt and who is responsible for any repayments that build up during the marriage is vital.
- Inheritance: Any inheritance expected should also be detailed in your prenuptial agreement. This ensures that money and property that are handed down to you are protected and shouldn’t be considered part of the joint matrimonial ‘pot’ to be divided equally in the event of divorce.
- Savings and investments: Details of savings and investments are another important addition to your prenuptial agreement. Any money or similar that you hold separately should be detailed.
- Business ownership: if you own or part-own a business independent from your partner, it’s critical that it’s included in your prenup as a separate asset. This ensures your partner can’t make a claim for ownership or management rights if your relationship breaks down. This doesn’t just to protect your financial wellbeing; it also helps to safeguard the smooth operation of your business in the event of an acrimonious split.
- Children from previous relationships: If you have children from a previous relationship, your prenup can and should specify the assets due to them rather than your spouse. By outlining how your assets will be distributed, you’re safeguarding their future and ensuring that assets intended for them won’t be shared with your partner. As a parent this provides important peace of mind that your children will be taken care of.
- Future earning potential: If you’ve worked hard to build a successful career before meeting your partner and expect to see your earning potential significant increase during your marriage, this could be added to your prenup.
How can both parties ensure the agreement is fair and enforceable?
A prenup drafted by a family solicitor is much more likely to be fair and enforceable than one created from an online template or privately agreed.
Your solicitor will ensure that all legal considerations and requirements are met. This includes assuring full disclosure has been made, ensuring the agreement is accurate and balanced, and that the future financial impact of the prenup is understood before it’s signed.
Each partner should seek independent legal advice to ensure their best interests are taken into consideration.
Ample time should also be allowed before the wedding for the prenup to be discussed and agreed.
What are the consequences of not having a prenuptial agreement?
If you enter into a marriage without a prenuptial agreement, you may find that your partner has an equal claim to your assets during a divorce and the courts will be responsible for deciding who gets what.
The family court generally works on the basis that assets accrued during the marriage should be divided 50/50 unless a strong argument can be made to deviate from that base line. This means you leave yourself open to giving up property, income and even shares in a business if the court is left to decide the details of your financial settlement in the event of a divorce.
Our family solicitors have helped countless couples to navigate prenuptial agreements. We’re here to provide you with trusted, confidential advice and legal guidance to ensure your assets are protected and your prenup is fair and enforceable. Schedule a consultation to discuss your circumstances in confidence.
