What is a prenuptial agreement?
A prenuptial agreement, or ‘prenup’, is an agreement made between a couple before they get married or enter into a civil partnership. It is designed to protect pre-marital assets before the marriage begins. It sets out each person’s rights in relation to income, inheritance, property, debts and any other assets acquired before marriage.
A prenuptial agreement can cover a wide range of assets and arrangements. It might protect a large inheritance, set out what happens to a business, or even deal with personal matters such as who keeps a pet if the relationship ends. This means every prenuptial agreement can be tailored to suit the couple’s circumstances.
Once you are married or in a civil partnership, your assets may be treated as marital assets. If you divorce, there is a risk that assets could be divided between you, including assets that were originally yours. Although divorce is rarely something couples want to think about before marriage, in some situations it can make sense to seek a prenuptial agreement.
Why might you want one?
There are several reasons why you might consider getting a prenuptial agreement. These include:
- Protecting an inheritance you expect to receive and want to keep separate from marital assets
- Protecting the inheritance rights of children from a previous relationship
- Retaining control of your assets if you have been married before and are marrying again
- Keeping large personal savings separate from joint assets
- Protecting a business that one partner owns and intends to continue running
- Ensuring property or other valuable assets remain separate from marital assets
- Making arrangements for assets that would be difficult to divide equally
Will it stand up in court?
In the past, prenups were often seen as something associated with celebrities or as more of an American concept. In Britain, they have historically been less common, and in England and Wales they are not technically legally binding. However, since a landmark ruling in 2010, courts have treated prenups much more seriously. If they were entered into freely and properly before marriage, they can carry significant weight in a financial dispute following divorce.
In Scotland, a prenup is legally binding, provided it was fair and reasonable at the time it was drawn up.
In England and Wales, the court will consider whether the prenuptial agreement was fair and whether both parties fully understood what they were signing. Courts will usually want to see that both partners received separate independent legal advice from solicitors. This is especially important for the person who may have more to lose under the agreement. If the court is satisfied that there were no issues, there is a strong chance the prenup will be upheld.
It is also important to remember that circumstances may have changed since the agreement was made. For example, the couple may have had children. The court will consider whether the terms of the prenuptial agreement would negatively affect any children. Because a prenup is not technically binding in England and Wales, a court may choose not to follow it if doing so would harm a child’s interests.
Do I need a solicitor?
It is strongly advised that you hire a solicitor for a prenuptial agreement. You and your partner should each seek separate legal advice to avoid any conflict of interest.
As explained above, if you later go to court during divorce proceedings to seek a financial settlement, a judge will want to see evidence that your prenuptial agreement was valid and entered into willingly and with full understanding. Having a solicitor advise you and help draft the agreement can provide that reassurance.
