A prenuptial agreement, also known as a premarital agreement, is a written contract that a couple enters into before marriage.
It outlines how the couple’s assets will be divided if they divorce.
Premarital agreements can also help couples control and select many of the legal rights they gain when they marry.
In England and Wales, premarital agreements are not legally binding, but they can be persuasive and are likely to be upheld depending on the case providing the courts are satisfied that both parties freely entered into the agreement with full understanding of the implications.
In the UK, premarital agreements can help couples protect assets such as:
- Pre-owned assets
- Expected inheritance
- Trust funds
- Assets left to children from a previous marriage
- Their partner’s debt.
Premarital agreements can also help make the divorce process more efficient by avoiding lengthy court battles and legal disputes. This can save time and money and make the divorce process less stressful for everyone involved.
When considering a premarital agreement, you can consider things like:
- What would happen to money in joint accounts and jointly purchased property?
- What would happen to savings earned during the marriage?
- What would happen to pensions?
- How would debts be dealt with?
- Would either party pay or receive maintenance, and if so, for how long?
- What events might require the agreement to be reviewed?
- What arrangements would be made for any children, both financially and practically?
To be legally enforceable, a premarital agreement must be contractually valid. This means that there must be no factors that cast doubt on the free will of either party or the level of information they had when entering the contract. Evidence of mistake, misrepresentation, duress, or undue influence may cause the agreement to fail. As regards the level of information couples are advised to give full disclosure of their assets to each other before entering the agreement.
Where full financial disclosure has been given, the courts are more likely to uphold the arrangements set out in a prenuptial agreement in subsequent financial proceedings ancillary to divorce, although it should be emphasised that the couple cannot ‘contract out’ of the courts power to review the financial arrangements and step in following a divorce if one of the party’s needs are not being met.
As a preliminary to setting up a prenuptial agreement, we would invite a couple to:
- prepare schedules of assets and liabilities.
- consider what protections you wish to put in place as regards pre-marriage solely owned assets e.g. savings, property, pensions, inheritance, Trusts, stocks and shares etc.
- consider what you want to happen as regards assets acquired during your marriage either jointly or in your sole names.
- what is to happen as regards debts?
- provision for children
- any other matters particular to your circumstances
If you have any questions regarding prenuption agreement, please contact our family law solicitors at 020 8240 9018 or dorothy@jypartnerssolicitors.com.