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PRE-NUPTIAL AGREEMENTS : WHAT YOU SHOULD KNOW ?
Joanne Raisbeck , partner in Hill Dickinson ’ s family law team , explains how a prenuptial agreement can ease any pre-wedding jitters .
It is the perfect romance : a couple meet , fall in love and decide to get married . But marriage entails not only a change of name , an exchange of rings and vows to be recited , but also significant financial implications .
With a third of marriages ending in divorce , the possibility of a marriage breaking down cannot be ignored .
What is a pre-nuptial agreement ? A pre-nuptial agreement ( otherwise called a prenup ) is a written agreement entered into by a couple before a marriage which sets out what happens to their assets in the event they later divorce .
Should I get a prenup ? Prenups are not just for those of celebrity status or the super-rich . In England , prenups are becoming increasingly popular for couples of all backgrounds , with many now seeing the value in the protection they can provide . It would be sensible to consider a prenup if :
• You have acquired assets before your marriage that you would like to protect
• You want to preserve assets for the benefit of children you have from other relationships
• You have your own business or investments that you would like to keep separate
• You anticipate benefiting in the future from family gifts or an inheritance
Are prenups legally binding in the UK ? Whilst pre-nuptial agreements are technically not legally binding under English law , in recent years there has been a real shift in the English court ’ s approach to such agreements .
The current position is that the court must give appropriate weight to a prenuptial agreement as a relevant circumstance of a case . The turning point was the Supreme Court ’ s decision in the case of Radmacher -v- Granatino in 2010 ; here the Supreme Court said that they should give effect to a pre-nuptial agreement , where the parties freely enter into it with a full appreciation of its implications , unless it would be unfair to hold the parties to the agreement .
For a pre-nuptial agreement to have weight at the time of a divorce , it must meet the following requirements :
• It must be entered into freely
• It must be entered into in good time before the marriage
• There must be sufficient financial disclosure
• The parties to the agreement must have taken separate independent specialist legal advice
• It must not prejudice the reasonable requirements of any children
• It must not leave one party with less than they “ need ”
Fundamentally , if you have signed a well drafted prenup which ticks off the above criteria then you should expect to be held to it as increasingly the courts are upholding such agreements .
Will I need to disclose information about my finances ? Yes . An essential ingredient to a robust prenup is the process of financial disclosure and you will each need to be transparent about your financial circumstances . We will be able to advise you about how much disclosure is necessary in your case depending on your circumstances .
When should I get a prenup ? The sooner you start the process the better as ideally you should sign the agreement at least 28 days before your marriage to avoid any suggestion of undue pressure or duress . Prenups can take 2-3 months to prepare and negotiate , so you should factor in this timeframe when setting the date of your wedding .
Can I get a prenup after I am married ? No , but it is possible to enter into a post-nuptial agreement ( a postnup ) which is like a prenup but for the fact is entered into at any time during a marriage . Just like a prenup , these agreements are not automatically binding , and the same principles apply .
What if we get married abroad ? If you have connections with England or live here during your marriage , it is likely to be prudent for you to have an English prenup . If you also have connections to another country , then depending on your circumstances we may advise a mirror agreement in that country as well and we often work with lawyers in other countries to ensure you have the advice you need .
How much will a prenup cost ? On average the costs for each party are between £ 5,000 - £ 10,000 ( plus VAT and expenses ) unless the agreement is particularly complex .
Do you need legal advice for prenups ? Yes . Each party will need separate specialist legal representation . If you would like to discuss prenups in more detail , please contact Joanne Raisbeck at joanne . raisbeck @ hilldickinson . com .
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