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Drafting nuptial agreements to protect your wealth, assets and business interests
Prenuptial and postnuptial (or prenup and postnup) agreements are used where one or both partners have wealth and assets accumulated prior to the marriage, which they wish to protect should the marriage end.
If this is something you’re considering, our family law solicitors can help.
What is a prenuptial agreement?
A prenuptial agreement is a legal document created between a couple before marriage, to agree the future division of finances in the event of a divorce.
They are often the best way to ensure that if a marriage ends, there will be as little conflict as possible about how your assets should be divided.
As an example, a couple will sign a nuptial agreement to protect existing family or business assets which they intend to pass on to children from a previous relationship.
Our prenuptial agreement solicitors can help you with an agreement that covers your individual needs.
What does a prenuptial agreement cover?
A prenuptial or postnuptial agreement can cover almost anything you want it to. Common questions that couples usually consider as part of their prenup include:
- What would happen to properties one of you owned before the marriage?
- What would happen to the family home?
- What would happen to any property given to you or inherited during the marriage, or any income or assets derived from trusts?
- What would happen to money held in joint accounts and any property
- What would happen to any saved money earned during the marriage?
- What would happen to your pensions?
- How would you deal with any debts?
- Would either of you pay or receive any maintenance and, if so, for how long?
- What kinds of events might require the agreement to be reviewed?
- What kinds of arrangements would you like to make for any children you have or are likely to have, both in financial and in practical terms?
What are the benefits of having a prenuptial agreement?
The key benefit of a prenup agreement is to set out clearly how assets would be divided should the relationship break down.
A prenup allows a couple to make it clear to one another that certain property belongs to them alone and will not be shared during the marriage or on divorce. Such property is often referred to by family lawyers as “non-matrimonial property”. The definition of non-matrimonial property is unclear in case law, but can be clearly defined in the nuptial agreement.
Prenup agreements generally minimise acrimony or arguments during divorce. By clearly setting out how assets are to be divided on divorce should lead to fewer disputes about finances, and could result in a more amicable relationship.
Other benefits include:
- It can protect your assets, including property and business interests.
- It can protect you from your partners’ debts.
- It can safeguard your children’s inheritance.
- It can set out how you manage your joint finances during the marriage.
What is a postnuptial agreement? What is the difference from a prenuptial?
A postnuptial agreement serves the same purpose as a prenuptial agreement; it sets out how finances would be split in the event of the marriage ending.
The key difference between a prenup and postnup is a postnup agreement is entered into after marriage and a pre-nup (also called premarital) agreement is entered into before a marriage.
Is a prenup or postnup legally binding?
Prenups and postnups are not currently legally binding in England and Wales but, that does not mean that they are of no use.
If one partner disagrees with the effect of a nuptial agreement on divorce and chooses to seek a financial order in court, a judge is likely to take a prenuptial or postnuptial agreement into account and is likely to support it, as long as certain safeguards have been met.
Recent cases show that nuptial 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 put under pressure to sign the agreement
- There has been no significant change which would make the agreement inappropriate (for example, the birth of children)
- In a prenuptial agreement, there was a sufficient period of time between the signing of the agreement and the wedding, at least 28 days before you marry
- Full and frank financial disclosure of both parties’ assets was made prior to the agreement. i.e. assets were not hidden
- The terms of the agreement have to be fair and realistic. If the division of assets is weighted too heavily in favour of one party, it may be judged to be unfair by the courts and disregarded.
Does a nuptial agreement affect my will?
Yes, prenups and postnups can affect your will – we advise that you update your will to reflect your agreement. If your circumstances then change, updates should be made to both your will and your nuptial agreement.
This means contradictions are avoided and in the event of a death, claims are less likely to happen.
Do I need a postnuptial agreement if I have a prenuptial agreement?
You might decide to have a postnup if there has been a change of circumstances after your prenuptial agreement was agreed, and if the marriage has already taken place. For example if a child has been born in the relationship. A postnup agreement can reaffirm the terms of a prenup.
How our solicitors can support you with your prenuptial or post nuptial agreement
We know discussing financial issues can be a difficult aspect of any relationship. For some couples, drawing up a nuptial agreement using a professional adviser gives them valuable peace of mind so they can concentrate on other aspects of their lives.
Our family law solicitors are approachable and personable and will help draw up your agreement according to your individual circumstances.