Pre Nuptial and Pre Relationship Agreements

Nobody wants to begin their marriage by thinking about what might happen if it does not work out. However, the unfortunate reality is that a significant proportion of marriages in the UK end in divorce.

Agreeing on how to separate finances and other assets can often be a particularly painful and acrimonious part of the divorce or separation process. That is why it can be a good idea to enter into a prenuptial or postnuptial agreement at the beginning of your marriage, as an insurance policy in the event of a worst-case scenario.

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What is a Prenuptial Agreement?

Protect assets before or during your marriage or civil partnership

If you’re about to get married, a prenuptial agreement (or post-nuptial agreement if you’re married already) can provide greater financial certainty should your relationship end in divorce and help to protect assets such as property, pensions, businesses and inherited wealth.

You should think about setting up a prenup if you:

What will a Prenuptial Agreement include?

Prenuptial agreements can cover a variety of issues. When preparing an agreement, prenuptial agreement solicitors should advise you on what is appropriate to include. This can include, but is not limited to, the following:

Property

A prenuptial agreement should cover property each spouse brings with them into the marriage, as well as what will happen to the family home in the event of divorce.

Money

Both money and investments held separately, and savings and other money kept in joint accounts should be accounted for in a prenuptial agreement.

Debts

A prenup should not just safeguard each partner’s existing assets, but also protect against debt liability should one spouse build up debts.

Children

A prenuptial agreement can also be used to dictate what rights children from a prior marriage have to any property or assets in the event the current marriage breaks down.

Inheritance

A prenup can be used both to ring-fence assets one partner intends to pass on as inheritance and to protect the expected future wealth either spouse may gain as a beneficiary of inheritance.

Financial Management

A prenuptial agreement can be used to agree and record how you intend to support yourselves financially during the marriage. For example, whether you and your spouse wish to pay for household expenses equally or in proportion to your income or assets.

Having discussions about these matters at an early stage can help ensure that you are both on a level footing, with a clear understanding of how your finances will be managed both in your marriage and in the event of separation or divorce.

Postnuptial Agreements

While most people may have heard of a prenuptial agreement, fewer are aware that it is possible to draw up a postnuptial agreement once you are already married.

Postnuptial agreements are largely the same as prenuptial agreements: they cover the same topics and require the same voluntary agreement from both parties, backed up by a solicitor’s advice, to ensure validity. One important distinction to note, however, is that postnuptial agreements are not currently legally binding, although they will still be taken seriously by the Court.

Benefits of a PreNuptial

The main advantages of entering into a pre-nuptial agreement are as follows:

Clarity. You and your partner can make it clear to one another that certain property belongs to you alone and that it will not be shared on any future divorce. Such property is often referred to by family lawyers as “non-matrimonial property”.
Certainty. You and your partner have the freedom to agree at the outset of your marriage how your finances will be divided if you later separate or divorce. This should save you both the uncertainty, time and stress of litigating about the matrimonial finances if you do later separate.
May save money. Whilst you and your partner will incur legal fees for the preparation and drafting of the Pre-Nuptial Agreement, it is usually much cheaper to negotiate and draft a Pre-Nuptial Agreement than it is to litigate over the division of the matrimonial finances.

Protection of assets. You and your partner can agree to “ringfence” sentimental assets such as family heirlooms, an interest in a family business or gifts received from a third party. If the Pre-Nuptial Agreement seeks to ring-fence such property, the Court is less likely to award a share of that property to the other party on any future divorce.
Minimises acrimony on divorce. Setting out how assets are to be divided on divorce should lead to fewer arguments about finances, and result in a more amicable relationship between you and your partner during the divorce process.
Protection of business partners. You or your partner may have an interest in a family or small private business. The Pre-Nuptial Agreement can protect that interest, and prevent disruption to the business in the event that the marriage breaks down.

Prenuptial FAQ

Are prenuptial agreements legally binding in the UK?

Currently in England and Wales, prenuptial agreements are not legally binding. However, parties should enter into them expecting them to be binding and, if done correctly, the Court will take them into consideration when agreeing your divorce settlement.

If you want to make sure your prenuptial agreement is enforceable, you and your partner must both have taken legal advice independent of each other. Your solicitors need to have advised you on the contents of the agreement and how it would affect you both if you decided to divorce.

This is important because if the Court believes one of you did not get the right advice, and that this puts either of you at a disadvantage, it can decide to ignore the prenuptial agreement when reaching a decision.

When should I consider discussing a prenuptial agreement?

It’s important that you each have sufficient time to consider the terms of the prenuptial agreement and receive legal advice about the effect of those terms. It’s good practice to finalise the agreement well before the wedding (ideally a minimum of 28 days prior to the ceremony), so that neither of you feels undue pressure to agree.

It can take time to deal with financial disclosure, negotiations and legal advice. If either of your finances are complex (for example involving trusts, or international assets) then further time will be needed and specialist advice may be required.

How do I suggest a prenup?

We understand that this can be a difficult conversation to have, but a good approach is to see it as a way of strengthening your marriage, in that you are having open discussions about your finances from the outset.

You may suggest a prenup because of feelings about previous marriages or children from other relationships and a wish to protect assets for reasons that existed before your current relationship started. In other cases, issues arise from wealth planning, such as parents who want to pass wealth down their bloodline without the risk of it being affected by divorce. Or you may want to protect certain assets, like business interests or any personal assets/wealth that you brought into a marriage.

Suggesting a prenup can also help you discuss your financial needs, any plans you have that will affect your finances during marriage (like whether to have children), what assets you want to ringfence and why, and what each of your finances will look like if the worst were to happen and your marriage was to end.

How does a prenuptial agreement affect a Will?

Ideally, an up-to-date Will would reflect the terms contained in a prenuptial agreement and vice-versa. If someone dies and their prenup contradicts the terms of their Will, it may give rise to other claims, so it’s important for you to check your Will reflects your wishes.

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