Pre-nuptial Agreements: A Short Guide

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In this article, I explore what a pre-nuptial agreement is and why it matters when you are considering getting married or entering a civil partnership and the effect these have when you decide to separate and/or formally divorce.

What is a pre-nuptial agreement?

A pre-nuptial agreement is a document that is drawn up by a couple before they get married. The purpose of a pre-nuptial agreement is to provide clarity as to how the assets they own will be divided or retained if the relationship breaks down. It is often referred to as a ‘pre-nup’. The equivalent for civil partnerships is called a pre-registration agreement.

Your pre-nuptial agreement will last from when it is signed until the end of your marriage or civil partnership. At this point, it will be reviewed by the Court to determine how your assets and property is divided.

What should be included in a pre-nuptial agreement?

The agreement should contain the essential points about property and financial matters including entitlement, control of assets, protection against debts and liabilities, and safeguarding children’s inheritance or assets. Typically, a pre-nuptial agreement will include any or all of the following:

  • Business interests
  • Inherited money and/or property interests
  • Individual income (including future earnings)
  • Pensions and savings (including Premium Bonds)
  • Property jointly or individually owned
  • Stocks and shares

Your pre-nuptial agreement should record all of your assets and property and who owns or has rights over them. The agreement should set out what (if anything) is to happen to each asset if the relationship breaks down.

Because pre-nuptial agreements deal with assets and property, they cannot include other elements. There are rules about what can be included and what must be excluded.

What should not be included in a pre-nuptial agreement?

The principal of fairness will be upheld by the court which means that your pre-nuptial agreement cannot be materially unfair. Elements to avoid in a pre-nuptial agreement include:

  • Children’s welfare, upbringing, visitation or maintenance
  • Personal or lifestyle matters
  • Illegal matters

If any of the above are included or the rules are not adhered to, your pre-nuptial agreement may not be relied upon where the details of your separation are later reviewed by the courts.

The legal status and enforceability of a pre-nuptial agreement

Pre-nuptial agreements are not legally binding in the UK (meaning the Court is not obliged to accept them) and can be overturned by the Court. However, they are becoming more widely accepted by courts as a reflection of the intentions of the parties as to what happens when they divorce. Pre-nuptial agreements are usually made many years ahead of divorce and the Court will consider changes to circumstances and whether the couple’s intentions are still as set out in the agreement.

For your pre-nuptial agreement to be enforceable, as suggested by the Law Commission, it should follow the principles of contract law, being;

  1. Made without undue influence and entered into of free will
    1. Made in writing in the form of a Deed with a statement confirming that each person understands the enforceability of the Deed
    1. It must be signed no less than 28 days before the marriage or civil partnership
    1. All the financial information and assets and property must have been shared in full with each other
    1. Independent legal advice should be sought before entering into the agreement;

And in respect of matrimonial matters, the agreement must not prejudice the reasonable requirements of any children involved in the divorce or separation.

Changing the terms of a pre-nuptial Agreement

Once the pre-nuptial agreement has been signed or you are married, the terms you have agreed cannot be amended. However, you can enter into a post-nuptial agreement, which is broadly the same but is entered into after you have married. The same principles apply to post-nuptial agreements, and you should follow best practice as to entering into new terms and provide full disclosure as to your assets and property on the same basis.

Should I get or enter into a pre-nuptial agreement?

Pre-nuptial agreements are entered into to protect property and money and other assets that at least one person decides not to share in the matrimonial pot. They are also used to protect another person from liabilities of debt that has been acquired by the other person.

The key question to ask is: do you have something to protect that should not be shared as part of your marriage? Your spouse should be fully aware of your assets and there should be no hidden or undisclosed property, money, or other assets.

Each of the couple should seek legal advice and assistance to draft and negotiate the pre-nuptial agreement. There are costs involved in drafting such agreements, and quotes should be sought. However, the divorce cost could be greater if you do not have an agreement in place and you have significant assets to protect.

If you need assistance with any of the above issues or require support with your separation, please contact Sima directly by calling 02073531746 or via email: clerks@simanajma.com.