What is a prenuptial agreement?
A prenuptial agreement is a formal agreement which sets out how a couple’s assets will be divided in the event of a separation or divorce. This is done before the marriage.
Why do we need a prenuptial agreement?
Prenuptial agreements are commonly used when one partner has a substantial wealth prior to the marriage and wishes to protect their wealth in the event of the marriage failing.
As an example, in some cases, a couple will sign a prenuptial agreement to protect existing family assets which they intend to pass on to any children. If a family has substantial wealth, and one partner has an expectation of inheriting that wealth during the marriage, they may plan to protect that wealth by making a prenuptial agreement.
Is a prenuptial agreement legally binding?
Prenuptial agreements are not currently legally binding in the England, however that does not mean that they are of no use.
A judge is likely to take a prenuptial agreement into account when overseeing a case and is likely to support it, as long as certain safeguards have been met.
Recent cases show that prenuptial agreements are being upheld in many instances. For an agreement to be upheld, the following safeguards should be met:
- Both parties received independent legal advice about the agreement at the outset
- Neither party was under pressure to sign the agreement against their will
- There has been no significant change which would make the agreement inappropriate (for example, the birth of children)
- There was a sufficient period of time between the signing of the agreement and the wedding.
- Full and frank financial disclosure of both parties’ assets was made prior to the agreement. i.e. Assets were not hidden
- The agreement has to be fair and realistic. If the division of assets is weighted too heavily in the favour of one party, it may be judged to be unfair by the courts and disregarded
- Prenuptial agreements should be reviewed and amended periodically during the course of the marriage and particularly when any children are born.
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