Our Lorraine Ridley, Chartered Legal Executive talks about Prenuptial Agreements, when they are used, why they are used and whether they are legally binding.
A Prenuptial Agreement in the UK is a legal document drawn up between a couple before their marriage or civil partnership. It records the ownership of assets and details what will happen to these assets should the relationship break down and end in divorce or dissolution.
Once you are married or enter into a civil partnership, any assets you own may become matrimonial assets. If they are treated as matrimonial assets, then they will be included in the “marital pot” and may be shared between you and your partner upon the breakdown of the relationship. A Prenuptial Agreement allows for each party to safeguard certain assets to prevent them from being divided in this way. These items do not need to have a high financial value or even be in your possession at the time you enter into the Prenuptial Agreement.
There may be a disparity in wealth between you and your partner. The most common reason for signing a Prenuptial Agreement is when one partner is bringing significantly more wealth or assets into the marriage than the other. The Prenuptial Agreement allows the wealthier spouse to safeguard any assets that they could have been building up for years or decades prior to the marriage. Provision can be made to ensure that there are no disputes later down the line and can specify what will happen with properties, your business, money and investments, debts and inheritances. A Prenuptial Agreement can also be used to state what rights children from a prior marriage have to any property or assets in the event the current marriage breaks down.
The only way to secure a legally binding financial settlement is to seek a Court Order after the marriage or civil partnership has broken down. However, you may not want to leave this to be determined by the Court at a later date and would prefer to safeguard your assets at the outset of your relationship.
Whilst a Prenuptial Agreement is a legal document, the Court always has the power to override the agreement if they feel that one of the parties or a child of the family is likely to suffer severe financial hardship if the agreement is upheld. However, the Courts are now giving greater weight to the agreements. Provided it can be shown that each party had full knowledge of the other party’s financial position and were given the opportunity to seek their own independent legal advice prior to entering into the agreement, then the Court are more likely to uphold the terms of the signed agreement.
Yes, it is important that you instruct a Solicitor to advise you on the terms of the agreement and then draft the document for you to both sign. If you attempt to draft an agreement yourself then you run the risk that this may not be upheld by the Court in the event of a dispute later.
The agreement must be signed by both parties at least 28 days before the wedding or civil ceremony. It is therefore imperative that if you wish to seek such an agreement, that this finalised and signed well in advance of the ceremony, otherwise and your spouse could claim that they were coerced into signing the agreement and this would render it invalid.
No, it is an agreement that is signed before the marriage. However, you can enter into a Postnuptial Agreement, and this could be upheld in the same way as a Prenuptial Agreement.
Unless otherwise specified, the agreement will last the lifetime of the couple’s marriage or civil partnership.
Yes, we would recommend that it is kept under regular review. There may be an unforeseen change in circumstances that could affect the likelihood of the Court upholding the agreement, such as illness or the birth of a child. The agreement can be varied to include additional assets or change the way assets are divided.
Please contact our Team for a fixed fee consultation and we can advise you on your options.