Planning the future downfall of your marriage with your partner is not the most romantic discussion to have, yet finances both before and after a marriage are becoming an increasingly important subject to many couples that are planning to marry.
Prenuptial agreements, better known as prenups, are not a new trend made popular celebrities, but rather can be dated back over 2000 years.
Today, the prenup is used to protect each spouse’s property and finances should the marriage end in divorce.
What are prenups and what should they contain?
A prenup is a formal agreement in the form of a contract, between two people, made before they enter into a marriage or civil partnership.
The agreement should set out how their finances are to be organised in the event of a breakdown in the marriage or partnership.
An agreement will be tailored to each couple and limited to what they wish to include. This could be property they acquired before the marriage, business interests and the interests of any children the spouse may have from a previous relationship
Are prenups legal?
Currently prenuptial agreements in England and Wales are not legally binding. Courts will consider agreements as the intentions of the couple and the enforceability of the agreement will depend on how fair it is, with the court using its discretion in cases where the agreement is found to be unfair.
A case in 2010 set a precedent on how courts should approach prenups, stating that they should consider an agreement that has been entered into freely by each spouse, who have fully appreciated its implications. The court should also look at the current circumstances and whether it would be unfair on one spouse should the agreement be enforced.
There are also other factors that the court will consider, such as whether both parties sought legal advice prior to entering into the agreement and the time between the agreement being signed and the wedding, which could indicate that pressure had been used to get a spouse to sign the agreement.
If prenups are not legal, why should we get one?
Although not legally binding, a prenup can offer a safety net to both spouses. Courts can look at an agreement and decide to respect the wishes of the couple, so long as they feel that it would not be unfair.
Current statistics regarding marriage and divorce show that many couples are choosing to marry later in life, meaning they may be entering into marriage with assets they wish to preserve should the marriage not last.
There are also many couples who have children from previous relationships, meaning they may wish to preserve the assets they accumulated prior to their new relationship, so that their children’s inheritances are protected.
Equally, a person who established a business before their marriage may wish to protect it in a divorce.
What happens if we do not have a prenup?
In England and Wales, the courts will look at the couple’s roles and values as equal, even if one is considered an ‘economic provider’ and the other is the child carer or homemaker. Therefore, when it comes to splitting the assets and property, the starting point will generally be an equal split, the needs of both spouses will then be taken into account.
This means that some couples can find the outcome unjust, especially if they had significant property before even meeting their spouse, which became ‘matrimonial assets’ when they married.
How do I go about getting a prenup?
For a prenup in England and Wales to be considered by the courts, it most importantly be reasonable and fair.
An agreement that has been entered into with independent legal advice will be considered with more weight by the court as there will be less likelihood of any undue pressure or influence. A solicitor will also ensure that there has been full disclosure of property and assets as well that the agreement is fair, especially with any provisions regarding children.
Do not wait until the last minute before the wedding to sign an agreement, it must be thought about carefully and within a reasonable time before the wedding so the court knows there was no pressure involved.
To speak to a member of our family law team, ring us on 0345 2413100 or email us at email@example.com.