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The Golden Rules of Prenuptial Agreements (Prenups)
As we approach this romantic date in the calendar you may be thinking of buying your partner a bunch of flowers or taking them to a fancy restaurant. As you sit in the restaurant staring into your beloved’s eyes you may be tempted to say something rash such as, “Will you marry me”?
You should actually be saying, “Shall we sort out a prenuptial agreement and will you then marry me?”
Alternatively, you may be the one being proposed to and in the excitement of the moment just blurt out, “Yes I will”.
Should you have said “Yes, lets sort out the prenup and then get married.”?
Whilst suggesting to your partner that a prenuptial agreement is required maybe somewhat of a romance killer, the reality is that the divorce rate for the UK in 2021 is estimated at 42%. There were over 103,592 divorces in the UK in 2020. Therefore, if you are getting married and already have assets or are the wealthier partner in the relationship then you must give serious consideration to entering into a prenup. It is the most sensible way of protecting your wealth. Simon Hawkins, Family Solicitor based across WSP Solicitors’ Gloucester offices provides his insight and top tips.
What is a prenuptial agreement?
A prenup is an agreement you and your partner will sign up to prior to getting married or entering a civil partnership. It is essentially a contract between the two of you setting out how the finances and assets are to be divided should the marriage unfortunately breakdown and you divorce.
The legal position of a prenup is that it does not bind the court (i.e you may have a prenup but if the court decides otherwise they can make an order which is different to what you have agreed). You may therefore think that there is no value or point in getting a prenup, but if you follow the golden rules below then a prenup can be a very effective way of protecting your pre-marital assets and/or wealth. A prenup made following these rules is going to be persuasive and likely decisive at court and therefore the best way to protect your wealth.
Further, the prenup may prevent the need for costly litigation at court saving you time and money as it will form the basis of any financial order/agreement within the divorce process.
When should I get a prenuptial agreement?
If you get married without a prenup then once married generally all assets whether in your own name or joint names will fall into the matrimonial pot.
If you divorce you will then need to negotiate a financial settlement, the starting point of which is a 50/50 split of the assets. The final settlement reached will be reliant on a number of competing factors and complex arguments surrounding ages of the parties, length of marriage, health, standard of living, contribution of the parties, the needs of each party etc. You will be at the mercy of the Matrimonial Causes Act and ultimately the courts.
Therefore, if you have assets prior to getting married, expect to come into assets (eg inheritance) during the marriage, expect during the marriage to accrue significant assets (eg a pension) or have a business you may wish to protect those assets and can do so by entering into a prenup.
The Top Tips (Golden Rules) for getting Prenuptial Agreements
As mentioned, the prenuptial agreement does not bind the court, but if it follows these simple rules below it can be decisive in the court ordering that the financial settlement must follow the prenup agreement.
The Prenup “Golden Rules”
- Both parties must instruct and take legal advice – this is to ensure both parties understand the agreement, there is no duress and there is evidence of creating a legally binding document.
- Both parties must enter into full and frank financial disclosure – this is to ensure at the time of making the agreement you each know the others financial position. If you did not know this information you may not have signed the agreement or requested a different settlement.
- Both parties must sign the agreement at least 28 clear days before the wedding date – this is to avoid duress. If the agreement is signed late consider transferring the agreement into a postnuptial agreement after the wedding.
- Any agreement must be fair and meet the needs of the parties and in particular the children – this is to avoid the financially weaker party being left unable to support themselves and the children from the marriage.
- Review the agreement, especially if a significant event has occurred such as the birth of a child or a significant financial change. If you enter into the agreement and the put it in a draw for 10 years and then wish to rely on it, you may find the circumstances of the marriage has changed and it is no longer fair and reasonable. We would advise reviewing your prenup at least every 5 years, or when a significant life event occurs.
Finally, remember that post marriage you can still enter into this type of agreement. They are known as Postnuptial Agreements and follow the same rules as prenups.
For any further information on Prenups, Postnups, Matrimonial and Family Law you can visit our Family Law Department pages here. To get in touch please use the contact form on this page, which can also be found here. Alternatively, you can call us on 01453 847200 and speak with one of our legal specialists today.