What is a prenuptial agreement?
A prenuptial agreement or ‘prenup’ is an agreement made between a couple before they get married or complete a civil partnership. It is designed to protect your pre-marital assets before entering your marriage. It sets out each couple’s rights in relation to income, inheritance, property, debts and any other assets acquired before marriage. A prenuptial agreement can include any assets you want it to. It can include anything, from protecting a large inheritance, to what happens to the dog if you divorce. This means that every prenuptial agreement has the potential to be different.
Once you are married or in a civil partnership, all your assets become the ‘marital assets’. They belong equally to you and your partner. If you divorce, you run the risk of having assets divided 50/50. You also run the risk of having assets that were originally yours awarded to your ex-partner. Although divorce won't be something you want to think about in the run-up to marriage, in some cases it might make sense to seek a prenuptial agreement.
Why might you want one?
There are several reasons why you might consider getting a prenuptial agreement. These reasons include:
- If there is an inheritance you are set to receive that you want to be kept separate from the marital assets
- If you have children from a past relationship and want to protect their inheritance rights
- If you have previously been married and after this experience and you want to retain control of your assets before marrying again.
- You have large savings which you have gained independent of your partner and want to keep out of the joint assets
- A partner has a business that they will continue to run and will probably keep running after a divorce/dissolution
- One partner wants to make sure their property or large assets remain separate from marital assets
- There are assets like property which would be hard to split 50/50
Will it stand up in court?
In the past, prenups have been seen as something that celebrities get and are more of an ‘American’ thing. In Britain, they have never been too popular, and in England and Wales are not technically, legally binding. But since a landmark ruling in 2010, prenups have been treated very seriously by the courts. If they have been freely and correctly agreed upon before marriage, they can hold significant weighting in a court’s decision in any financial dispute between a divorcing couple. In Scotland, a prenup is legally binding, provided it was an agreement that was fair and reasonable at the time of drawing up.
In England and Wales, the court’s decision will take into account whether the prenuptial agreement was fair at the time. They will examine if both parties knew exactly what they were entering into when signing. The courts will, therefore, want to see that both partners received separate independent advice from solicitors. This particularly applies to the person who has the most to lose from the prenup. The courts will want to make sure this person knew exactly what they were doing. If the court doesn’t find any issues, the prenup has a large chance of being enforced.
Importantly, the marital conditions may have changed since the prenup. Crucially, you may have had children. The courts will check the terms of the prenuptial agreement do not negatively affect any children. As a prenup isn’t technically binding, the court may dismiss it if it would negatively impact the children.
Do I need a solicitor?
It is strongly advised that you hire a solicitor for a prenuptial agreement. You and your partner will need to seek separate legal advice to avoid a conflict of interests. As explained above, if you go to court during divorce seeking a financial settlement, a judge will want to see proof that your prenuptial agreement was valid and entered into willingly and consciously. This can be ensured if you had a solicitor’s advice at the time who helped you draw up the prenup.