A prenuptial agreement is a contract entered into before marriage to define the distribution of assets in the event of a divorce or separation. In marriage, two individuals legally become one entity, meaning that assets could be split down the middle in the event of a divorce.
A couple may choose to enter into a prenuptial agreement in order to protect family assets, manage financial expectations, and avoid future disputes.
This guide will answer questions relating to the definition, benefits and legal implications of entering into a prenuptial agreement to help couples make an informed decision as to whether it is the correct option for them.
What is a prenuptial agreement?
A couple will enter into a prenuptial agreement before they marry or enter into a civil partnership which will dictate how they wish for their assets to be divided should the marriage or civil partnership be dissolved. It is a signed document drafted by a solicitor but it is not a legally binding agreement. It does, however, outline the wishes of both parties so will likely be considered by a judge in a divorce court.
A typical pre-nup will include clauses that address the following issues:
- Premarital, inherited and gifted assets: This will address the assets the individuals had before they entered into marriage. Often the prenup will stipulate that the assets need to return to their original owners.
- Disposition of income earned and assets required during a marriage: The prenup will outline how the money earned and assets acquired while the couple is married will be split in the case of a divorce.
- Legal fee responsibility: In the event of a divorce or legal dispute, it will be outlined in a prenup who will be responsible for paying the legal fees or how this will be divided.
- Spousal support in the event of a divorce: Sometimes in situations when one partner has given up their career in order to support the family, they will organise to have continued financial support beyond the dissolution of the marriage.
- Alterations to rights upon the death of a party: This will cover how the prenup relates to a document like a Will and how the prenup will be affected by the death of one of the spouses.
- Inheritance for children: A prenup can be used to protect the inheritance of children from previous relationships. The prenup can specify assets that should be passed to a child of one party, and shouldn’t be split with the new spouse in the case of divorce.
Outdated stereotypes suggest that prenuptial agreements are: indicative of a lack of trust, something that only wealthy couples do, and rarely enforceable. In reality, prenups can be a useful tool for many couples in a variety of circumstances to foster productive discussions about finances, build trust and enter their union with transparency and ease. Prenups, if properly written with legal advice, are also heavily considered in divorce proceedings, if not actually legally binding.
What is the purpose of a prenuptial agreement?
The purpose of a prenuptial agreement is to define the ownership of assets and property, protecting both parties in case of divorce. A prenuptial agreement will also address issues of alimony, spousal support and the responsibility for joint and individual debts. The purpose is primarily for the protection of both parties.
How does a prenuptial agreement work?
It is much more likely that a prenuptial agreement will be held up in court if the parties sought independent legal advice before signing. This is because it suggests to the court that the document is both a true representation of the desires of both parties at the time of marriage, and that it is fair. Involving a solicitor will also mean the document will be more accurate. For this reason, it is important for both parties to involve their own prenuptial agreement solicitors when putting the prenup together. These solicitors need to be able to prove their impartiality.
The process of putting together a prenup involves negotiation between the parties and their legal representatives. It is best to start this process well before the wedding date to avoid any risk of it looking like coercion has taken place. Some couples may opt for mediation to facilitate this. Once the terms including the division of assets, spousal support, alimony, and how the finances will be managed during the marriage are agreed on, the document is drafted by a legal professional and then signed by both parties.
Merriman Solicitors provide free 30 minute consultations for prenuptial agreements. You can trust our experienced family solicitors to ensure your agreement is fair, legally sound, and meets both parties’ needs.
Are prenuptial agreements legally binding in the UK?
Prenuptial agreements are not strictly legally binding under UK law, but are considered in divorce court, and will be adhered to if they are well-written by a legal professional and it can be proven that there was no coercion, unfairness or inaccuracy.
Common mistakes to avoid when creating a prenuptial agreement
Prenuptial agreements might be challenged in the following circumstances:
- Lack of independent legal advice: If either party didn’t seek independent legal advice or both parties used the same solicitor, it could be seen as unfair.
- Lack of full disclosure: If one or both parties didn’t fully disclose their assets or debts.
- Pressure: If one party was coerced into signing the agreement.
- Unfairness: If the agreement benefits or punishes one party disproportionately.
- Misrepresentation: If one party lied in order to encourage the other party to sign.
- Mistake: If there was a mistake in the agreement text.
Should you get a prenuptial agreement?
Prenuptial agreements can be particularly beneficial in the following circumstances:
- There are children from previous marriages
- There are significant assets
- There are business interests to protect
The benefits of getting a prenuptial agreement are significant even if none of these circumstances apply to every situation. Having financial security, clarity and personal assets protected can provide peace of mind so that a couple can enter into marriage with confidence and excitement.
The role of solicitors in prenuptial agreements
It is important for both parties to seek advice from a qualified family solicitor in creating a prenuptial agreement. This ensures both parties understand the legal implications of the agreement, can advocate for their interests and agree on fair terms. This means the document is more likely to stand up in court if it is ever needed.
Conclusion
A prenuptial agreement can be a valuable tool for couples looking to establish financial clarity and security before entering into marriage or a civil partnership. While not legally binding in the UK, a well-drafted prenup can significantly influence court decisions in the event of a divorce. By outlining asset division, spousal support, and financial responsibilities, a prenuptial agreement can help prevent future disputes and ensure both parties feel protected.
Ultimately, deciding whether to get a prenuptial agreement is a personal choice that depends on individual circumstances, such as existing assets, business interests, or children from previous relationships. Seeking independent legal advice is crucial to ensuring that the agreement is fair, properly drafted, and more likely to be upheld in court. With the right legal guidance, couples can approach their marriage with confidence, knowing that their financial interests are safeguarded.
Protect your assets and gain peace of mind with a professionally drafted prenuptial agreement. Book a free 30 minute consultation with Merriman Solicitors today and let our experienced family law experts guide you through the process.
