A common question raised with me is whether pre-nuptial agreements exist in English law, and more importantly, are they worth the paper they are written on? In short, the answer to both of these questions is yes!
A pre-nuptial agreement is a bespoke document drawn up before marriage to state what happens to a couple’s assets when they separate, and can cover almost anything a couple wants it to. There are certain things that couples usually consider such as what would happen to:
- Property brought into the marriage
- The family home
- Any property inherited during the marriage or any income or assets derived from trusts
- Money held in joint accounts
- Any saved money earned during the marriage
It is also important to consider:
- How any debts would be dealt with
- Would either party pay or receive any maintenance and, if so, for how long
- What events might require the agreement to be reviewed
- What arrangements would need to be made for any children or future children, both in financial and practical terms
Strictly speaking pre-nuptial agreements are not “binding”. The general rule of thumb is that, on separation, the court should give effect to a pre-nuptial agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.
In order to increase the chances of the court deciding that the parties should be tied into an agreement reached before marriage, there are a number of safeguards that should be put into place:
- The agreement must be entered into by the parties of their own free will without undue influence or pressure, and should be entered into as far in advance as possible (and in any event at least 28 days prior to the wedding.)
- Both parties should obtain independent legal advice regarding the terms of the agreement and its implications if the parties were to separate in the future.
- Each party should provide financial disclosure to be included in the pre-nuptial agreement, setting out their assets, income and potential assets such as inheritances and any interests under discretionary trusts as this will enable the terms of the agreement to be negotiated.