Getting married should be fun and exciting. The planning, shopping for wedding dresses, suit fittings, the honeymoon, the prenup.
Wait, what?
OK, prenuptial agreements aren’t exactly romantic or exciting, and we hate to put a downer on things.
However, according to the Office of National Statistics, 34.2% of all marriages since 1963 have ended in divorce.
As a result, Marriage Foundation’s research suggests that 1 in 5 weddings start with a prenuptial agreement.
Thought of divorce is probably the last thing on your mind. But it’s important to be aware that marriage is the biggest contract you’ll ever enter into. And they don’t all have a ‘happily ever after’.
By entering into a pre-nuptial agreement from a place of love and understanding, you can agree how you’ll divide your assets if things go wrong later.
What is a Pre-Nuptial Agreement?
A prenuptial agreement is a contract you enter into with your spouse before you get married.
It spells out;
- Who owns which assets, and
- How you’ll settle your finances if you end your marriage.
Prenup’s Aren’t Only For the Wealthy
There are lots of misconceptions about prenups. One is that only wealthy individuals like business people and celebrities need them to protect their wealth from their less wealthy spouses.
This might be because they often appear in the news and on social media when famous people get divorced.
However, prenup’s aren’t just for the rich, anyone can have one. In fact, there are several good reasons consider putting one in place.
Reasons to Consider Having a Pre-Nuptial Agreement
Once you’re married, the assets you owned before tying the knot become matrimonial assets. This means you might have to share them with your spouse if you divorce.
A pre-nuptial agreement allows each spouse to protect these assets, even if they aren’t worth a lot financially.
Here are 5 good reasons for considering a prenup;
One Spouse Has Significantly More Wealth
This is the most common reason for a prenuptial agreement.
If one spouse has amassed significant wealth over years or decades before getting married, a prenup can help protect that wealth.
Without a prenup, the wealthier spouse might stand to lose out disproportionally in a divorce.
One Spouse Expects Future Wealth or Inheritance
A prenuptial agreement doesn’t only protect exiting wealth.
If one spouse expects to earn more in the future, or is expecting a significant inheritance, a prenup can also protect it.
To Protect Your Business
Businesses can also count as matrimonial assets.
If one partner is a business owner, a prenuptial agreement can separate the business from the other assets. This doesn’t only protect them, but also any employees and others who depend on the business.
If There’s Potential of International Divorce
When marrying people from abroad, divorce laws in their home country could affect you.
A prenup could protect you from falling victim to foreign laws related to sharing of matrimonial assets.
To Prevent Joint Ownership of Debts
Prenuptial agreements don’t only protect assets. They can also help protect one spouse from inheriting the debts of the other.
What to Include in a Pre-Nuptial Agreement
Prenuptial agreements can help to protect a wide range of assets. You can tailor a prenup to your specific personal needs.
Assets include but are not limited to;
- How to divide any property that each party brought to the marriage
- What will happen to the family home
- What should happen to any inheritance during the marriage
- How to share saving, premium bonds and investments
- Inheritance, both current and future
- What should happen to any pensions
- How to deal with any businesses
- How debt’s should be paid off
- What should happen if circumstances change i.e. a review clause
When creating a prenup, both parties need to provide full financial disclosure. This means an honest and complete account of their income, debts, assets, and any potential inheritances.
Failure to provide full disclosure could result in a prenup being challenged in court.
What You Can’t Include in a Prenuptial Agreement
While prenups can be comprehensive, there are strict limits to what they can and can’t include. They’re limited to the protection of financial assets and/or debts.
As a result, they can’t include matters involving child custody and/or support.
What if I Don’t Have Prenup?
If you divorce without having a prenup in place, your matrimonial assets will be divided according to the laws of England and Wales.
To do this, the court will look at;
- How long you have been married
- The needs of each spouse and any children, and
- What each spouse contributed to the marriage
While the courts will make decisions based on what is fair and equitable, they have a lot of discretion. This can lead to outcomes you have no control over.
How Much Do Prenuptial Agreements Cost?
The cost of prenuptial agreements varies depending on the complexity and the needs of the couple.
That said, the cost of a prenup is a fraction of the cost of the average wedding. It’s also a fraction of what you could stand to lose if you enter into a marriage with significant assets and no protection in place.
If you are considering a prenuptial agreement, contact us today for a quote.
Frequently Asked Questions
Are Pre-Nuptial Agreements Legally Binding?
It’s important to know that technically, prenuptial agreements aren’t legally binding.
That’s not to say they’re worthless though.
Courts do take them seriously. There is no reason why a well-drafted prenup, written with proper legal advice, wouldn’t hold up in court.
To be enforceable, the agreement should meet the following criteria;
- Both parties must willingly sign the agreement
- Neither party must sign the agreement under duress
- Both parties have sought legal advice
- Both parties must provide full disclosure of wealth, assets and liabilities
- The agreement was signed no less than 28 days before the marriage
- The terms of the agreement must not prejudice against children.
Can I Contest a Prenup?
You can contest a prenup. However, you must be able to provide a legitimate reason for doing so.
Legitimate reasons for contesting a prenuptial agreement include;
- Children are prejudiced or treated unfairly
- One spouse was pressured into signing the agreement, or they signed it without the mental capacity to do so
- It can be proved that one party didn’t fully understand the implications of the agreement
- A spouse wasn’t honest in their financial disclosure
- If a spouse signed the document without proper legal representation
- If the agreement contains requirements that are used to control or demean a spouse
- The paperwork wasn’t properly filed
Can I Write My Own Prenup?
Technically, yes, you can write your own prenuptial agreement.
However, as it stands, prenuptial agreements aren’t legally binding. If you want a court to take your prenuptial agreement seriously, you need to prepare it in a very particular way. This includes both parties having had proper legal advice.
Writing your own agreement might initially save you money. But it could cost you an untold amount if the court deems your agreement unfair or invalid.
Writing your own prenup is incredibly dangerous.
Do We Both Need Our Own Solicitors?
To make your prenup as enforceable as possible, it’s important for each spouse to seek their own legal advice.
This will ensure that both of you fully understand the terms of the agreement.
How Long Do Prenup Last?
Prenuptial agreements last for the duration of your marriage.
Can I Use a Prenup For a Civil Partnership?
Yes you can. Civil partnerships are an alternative to traditional marriage for lots of couples, not just same sex couples.
Pre-nuptial agreements in the context of civil partnerships are known as ‘pre-cips’.
Can I Get a Pre-Nuptial Agreement After Getting Married?
As the name suggests, a pre-nuptial agreement is signed before marriage.
That said, if you’re already married, you can enter into a post-nuptial agreement. Also known as a ‘postnup’.
Do We Need a Witness to Sign a Pre-Nuptial Agreement?
When signing your prenuptial agreement, you should have two witnesses present.
The must be over the age of 18 and not family members. They will also need to sign the agreement and provide their address and occupation.