A prenuptial agreement is a contract that couples sign before they marry which addresses how property and assets are to be divided if the relationship were to breakdown. There are no set rules regarding what can and cannot be included in a prenuptial agreement, however, the majority of agreements are used to distinguish between assets obtained before the marriage from other joint assets.
Although, to some, prenuptial agreements may be perceived as unromantic, they do have important advantages. Contrary to popular belief, just because you sign a prenuptial agreement, it does not imply that you are planning to divorce. You are simply being wise and looking out for the best interests of everyone. Many people who enter into a prenuptial agreement report that it strengthens their relationship by removing a potential source of conflict and ensuring both parties know exactly where they stand financially. If a relationship were to break down, as the division of assets has already been agreed, it also reduces potential conflict during any divorce proceedings and can have a dramatic saving in legal fees as a result.
Given statistics show that broadly one in two marriages will end in divorce, a prenuptial agreement is a sensible step for the vast majority of people entering into marriage. It is something that should be considered alongside the need to consider writing a will that specifies how your property will be divided if you die.
Prenuptial agreements are not currently legally binding in England and Wales. However, provided the prenuptial agreement has been drafted properly, the courts are more often taking the view that these agreements should be upheld. For a prenuptial agreement to be upheld in court there is qualifying criteria that needs to be met as set by the Supreme Court which is as follows:
- Both parties must have received legal advice
- The agreement must be freely entered into
- It should not disadvantage any children
- There should be disclosure about the wider financial circumstances.
- The needs of both parties must be met
- Both parties must understand the implications of the agreement
- The agreement must be fair and contractually valid
- The agreement must have been made at least 28 days before the wedding.
Provided the above conditions are met, it is rare for a prenuptial agreement to be departed from in the event of divorce.
If you have any questions regarding prenuptial agreements, or if you would like to consider whether one is right for you, please get in touch with one of our specialist family lawyers.
