Pre-nuptial Agreement

A prenuptial agreement is a contract entered into between two people before they marry. It records the ownership of assets and details what will happen to these assets should the marriage break down and end in divorce i.e. it sets out “who gets what”.

There are a number of reasons why you might consider signing one before marrying:

• Once you are married, any assets you formerly owned yourself may become matrimonial assets. If they are treated as matrimonial assets, they are thrown into the marriage ‘pot’, where they may be shared between you and your partner. Should the marriage end in divorce, both partners then have a claim on these assets.
• Also, a prenuptial agreement allows for each partner to ring-fence certain assets to protect them from this.

Where might you want to get a prenup?

• There is an existing disparity in wealth between you
• One of you has an expectation of future wealth
• There is a business to protect
• There is an inheritance to protect
• There is a possibility of international divorce law being applied

What can be included in a prenup?

• What property each brings in and what will happen to the family home
• What money, investment, and savings each party is bringing in
• Protection against the other party’s debts
• What rights children from a previous marriage have to any property or assets
• Inheritance assets can be ‘ring-fenced’.

It is very important to note that while prenuptial agreements are legal documents that will be considered by the Courts, when prepared correctly, the Court may, depending on the facts of a particular case, choose to divide your assets in a different way from the prenup. In deciding whether to uphold an agreement, the Court will start from the position that where a couple have entered into a prenup being aware of what they were doing and understanding the financial consequences, they should be held to the terms of their agreement unless the result of doing so would be to place one of them in a position of financial hardship.

The Court will look to see that at the time the pre-nuptial agreement was made the following factors were satisfied 

• Each of the couple understands the financial resources, income and liabilities involved. This requires each of them to disclose to the other what they own and what their assets are.
• Neither has been placed under undue pressure to enter into the agreement. This requires that the agreement be prepared in good time before the marriage and that each person has time to consider it (28 days at least).
• Each of the couple should ideally take independent legal advice.

Financial Hardship

The Court will want to ensure that holding the couple to the agreement will not put either one of them, or more importantly a child, in a position of grave financial hardship. Even if the Court decides that holding the parties to the prenup will cause grave hardship it will not disregard the terms of the prenup altogether. What was agreed will still be taken into account as one of the factors to be considered by the Court, but it will not be the only factor.

Post-nuptial Agreement

If you are already married it is not too late to protect your assets. In a landmark case in divorce law, McLeod v McLeod (2008), the Court ruled that a post-nuptial agreement, signed after the marriage had taken place, could be upheld in the same way as a prenuptial agreement, provided it was prepared so that it met the same criteria for validity as a pre-nuptial agreement.

Contact our Family Law Solicitors

If you have any enquiries in relation to a pre-nuptial or post-nuptial agreement, please contact our family law solicitors on 020 8240 9018 or via the enquiry form on our website.