Most of us will have heard of prenuptial agreements and they are becoming a more common factor for many couples who are planning to get married. It was once thought of as a tool to protect the very wealthy but is now being put in place by more and more people to protect their interests and to ensure that if they do separate in the future, it can be done easily and with as little stress as possible.
A prenuptial agreement lays out who is responsible for the property and finances of each partner during the marriage, and who the wealth will belong to if they should divorce. It can be very important when it comes to protecting the assets that you own before you marry as well as any unexpected inheritance, trust funds or assets that you want to leave to children from another relationship.
This can give both parties some form of legal protection before, during and after their marriage and can be an important factor in asset management.
What is a Prenuptial Agreement?
A prenuptial agreement is a legal document that is drawn up before a couple get married. This should outline what assets each owns before the marriage, including property, debts and income, and are most common in situations where one partner already has more assets than the other or is likely to acquire them during the marriage as a result of inheritance or trust funds. This can occur where one partner is a business owner, landowner or has been married before
Once the financial situation of both parties has been made clear, it is then possible to determine how these assets will be divided in the event of a divorce. A prenuptial agreement will usually cover issues such as how to protect the inheritance of a child or a specific asset such as a property or business.
It will also look to protect any inherited money, assets or savings. A prenuptial agreement is becoming more popular as it gives both parties the opportunity to say how assets should be split without being in the emotional turmoil of a relationship breakdown, and it can also give both parties the assurance that one can retain the full control of a business ownership or that one is protected from the debts of the other.
The prenuptial agreement should be agreed by both parties without duress and should be signed by each person.
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Legal Validity of Prenuptial Agreements in the UK
It is important to remember that a prenuptial agreement is not currently legally binding in England and Wales. However, in spite of this, courts are increasingly ready to accept them in divorce proceedings as proof of the intentions of a couple.
In order to be enforceable, the agreement needs to be contractually valid, meaning that it needs to be able to withstand any challenge that was put together under undue influence or misrepresentation, and it must have been entered into willingly and freely by both parties. It is also important that the prenuptial agreement must be made by deed and contain a statement that is signed by both parties to show that they understand the agreement is enforceable and that it can partially remove the discretion of the court when it comes to making financial orders in a divorce.
When entering into a prenuptial agreement, both parties must have received disclosure of material information about the other party’s financial situation, and they must have received legal advice at the time that the agreement was formed. It is also important that the terms of the agreement must not prejudice the reasonable requirements of any children.
The timing of a prenuptial agreement is also important in its validity, as it must not be made within 28 days immediately before the marriage or the civil partnership.
Whilst prenuptial agreements are not legally binding in England and Wales, the situation is slightly different in Scotland. Currently, a correctly prepared and validly executed prenuptial agreement will usually be enforceable and legally binding in Scotland.
How to Draft a Prenuptial Agreement
A prenuptial agreement is not something which should be drafted in a hurry, as it needs a lot of careful planning and discussion. Before you start, it is important that both parties seek legal advice independent of one another to make sure that their own personal interests are best represented and protected. This helps to ensure that the process is completely fair, and that one party is not able to take control.
Drafting a prenuptial agreement will require full disclosure from both parties. This means that you will need to be transparent about your current financial situation, the assets that you own and the debts that you might be responsible for. It is also important that you disclose any expected changes to your financial situation that may occur further down the line, such as a significant inheritance.
Once the financial position of both parties is clear, it is then necessary to decide what needs to be covered in the agreement. Your solicitors will be able to advise you on what assets you may need to protect and the factors that you will need to take into account. Each topic, such as finances, assets, pensions and agreed roles within the marriage, should be split into different sections to make sure that they are absolutely clear. You can then determine what will happen to these in the event of a divorce and how different circumstances which might lead to the breakdown of the marriage could affect the agreement. In addition to this, you should outline how changes in circumstances in the future might affect the agreement, such as one of you being made unemployed or suffering from a long term illness.
Once drafted, the prenuptial agreement should be checked by your independent solicitors to make sure that it is fair and abides by all of the rights that you might expect. When all parties are happy, the agreement should be signed by both parties, witnessed and kept somewhere safe.
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Common Misconceptions and Challenges
It is often believed that prenuptial agreements are only for wealthy couples, but this is not necessarily the case. They can be important for anyone who runs their own business and wants to retain control of it, or someone who has been married before and wants to ensure that some of their assets are protected for the children that resulted from that marriage.
It is also thought that prenuptial agreements can be a sign of a lack of trust, but they can actually help to foster trust through the openness that is required before the marriage. Honest and frank discussions can take place to ensure everyone knows exactly where they stand.
It is possible to challenge a prenuptial agreement, but only in certain circumstances. This is usually in the case that pressure was applied to one party, that someone was mentally ill at the time of the agreement or if it was signed less than 28 days before the marriage. However, if the prenuptial agreement has been properly drafted with independent legal advice, it is possible to avoid many of these issues.
How Lovedays Solicitors Can Assist
At Lovedays Solicitors, we are experts in advising on and drafting prenuptial agreements. We can help to understand your own individual situation and provide professional guidance on the best way to protect your financial position.
We can look at the details of you and your partner to determine what is fair and reasonable for you to both expect from a prenuptial agreement, and we can point you in the direction of other experts who can help with your finances. We can then help you to negotiate the agreement by taking each element of your finances at a time and helping you both to agree on a fair outcome. We can show you what needs to be included and can help you to consider any factors which you may not have already thought of.
Once everyone is happy, our friendly and professional can draft your agreement, making sure that it is a true and fair reflection of what you have agreed, and ensuring that it is legal and correct so that it will stand more chance of being enforceable if you ever need it.
Conclusion
A prenuptial agreement is not an unromantic gesture, it can be a practical step to protect what each of you owns and to help avoid much of the anxiety and bitterness that can come with negotiating a financial settlement during a divorce. It can help to give you both peace of mind and transparency before entering into a marriage, knowing that you have safeguarded your assets for yourself or your family.
If you are considering putting together a prenuptial agreement, speak to the professionals at Lovedays Solicitors today for expert and impartial guidance that can help to protect your own personal situation. We are here to help, and can make sure the process is fair, thorough and professional throughout.
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