A prenuptial agreement records how you and your future spouse intend your finances to be dealt with if your marriage ends. It can identify assets that should remain separate, establish how jointly owned property should be divided and clarify responsibility for debts and future financial support.

The main point of a prenup is to provide clarity. Rather than leaving every financial issue to be negotiated during a divorce, both parties can agree their intentions while the relationship is stable and they can plan constructively.

A prenuptial agreement cannot remove the powers of the court or guarantee a particular financial settlement. However, the courts in England and Wales can give substantial weight to an agreement that both parties entered into freely, with a full understanding of its implications, where it would be fair to uphold its terms.

In this guide, JMW's family law solicitors explain what a prenuptial agreement can and can't achieve, its limits  and how to put one in place.

What Is the Purpose of a Prenup?

The point of a prenup is to give both people a clear understanding of their financial position before they marry.

Without a written agreement, the division of assets may need to be negotiated after separation, when priorities have changed and relations may be strained. A prenuptial agreement allows the parties to discuss financial issues in advance and create an agreed framework for dealing with them.

This can be especially valuable where there are significant assets, business interests, family wealth or financial responsibilities from a prior marriage. However, prenuptial agreements are not limited to high net worth couples. They can be useful whenever two people want greater certainty about property, money and debts.

A prenuptial agreement may help you:

• Distinguish separate property from shared finances and marital property
• Protect wealth built up before the marriage
• Agree how future assets or income should be treated
• Make fair financial provision for both parties
• Reduce the number of issues that would need to be resolved during divorce
• Support wider succession, trust and asset protection planning

Discussing a prenup does not have to suggest a lack of confidence in the marriage. It can form part of responsible financial planning, particularly where either person has existing legal rights, financial commitments or family members whose interests also need to be considered.

What Assets Can a Prenup Protect?

A prenuptial agreement can cover most aspects of a couple’s finances. It cannot guarantee that every named asset will be excluded from a future financial settlement, but it can provide clear evidence of how both parties intended those assets to be treated.

Property

A prenup can identify property owned before the marriage, including the family home, investment properties, commercial premises and overseas assets. It can also record how mortgage payments, renovations or rental income contributed by either party should be treated.

Where a property becomes the family home, the court may still consider the housing needs of both spouses and any children.

Business interests

A prenuptial agreement can address company shares, partnerships, a family business, retained profits, future growth and sale proceeds.

For example, it may state that the business-owning spouse should retain their shares while the other spouse receives fair provision from different assets. This can help protect the business from disruption and should be coordinated with any shareholders’ agreement, partnership agreement or succession plan.

Inheritance and family wealth

A prenup can record that inherited wealth, family gifts and assets intended for future generations should remain separate.

How those assets are used will still matter. An inheritance kept in a separate account may be easier to distinguish from matrimonial assets than money used to buy the family home or fund the couple’s lifestyle.

This can be especially important where either party has children from a previous marriage or relationship.

Trust interests

Where one party is a trust beneficiary, the agreement can record how both parties intend the trust interest to be treated.

It cannot bind trustees or prevent the family court from considering whether trust assets are a financial resource. However, it can support a wider asset protection strategy by showing that both parties understood the nature of the trust and intended it to remain separate.

Savings, investments and pensions

A prenup can cover savings, investment portfolios, employee shares, cryptocurrency, pensions and other financial assets.

It can distinguish between separate property and assets intended to form part of the couple’s shared finances. However, the court may still consider both parties’ future needs, including retirement provision.

Personal property

Valuable personal property, such as artwork, jewellery, watches, vehicles, antiques and family heirlooms, can be identified as belonging to one party.

Including clear descriptions and valuations can reduce disputes over ownership later.

Debts and liabilities

A prenup can also allocate responsibility for debts, including:

• Personal borrowing
• Mortgages
• Business liabilities
• Tax liabilities
• Credit cards
• Personal guarantees
• Joint debts

It cannot alter a lender’s rights, but it can clarify how responsibility should be dealt with between the spouses if the marriage ends.

Read our guide to the basics of prenuptial agreements to learn more about what they are and what they can cover.

Can a Prenup Decide How Assets Will Be Divided?

A prenuptial agreement can set out how a couple would like their assets, property and income to be dealt with if the marriage ends.

Depending on the parties’ circumstances, the agreement may provide for:

• Each person to retain specified separate property
• Jointly acquired assets to be divided in agreed proportions
• A property to be sold or transferred
• One party to receive a lump sum
• Spousal maintenance to be paid for a defined period
• Particular pension arrangements
• Responsibility for specified debts
• A clean break once the agreed provision has been made

This can create a much clearer framework for dividing assets and agreeing a future financial settlement. It may also reduce disputes over which assets belong to the marriage and which should remain separate.

However, a prenuptial agreement does not replace the role of the court. If the parties divorce, the family court can still consider their overall financial circumstances, including income, property, pensions, earning capacity, housing requirements and the needs of any children.

Any settlement reached during divorce will normally need to be recorded in a court-approved financial order before it becomes legally binding. Our financial settlement solicitors advise on formalising agreements and resolving financial issues following divorce.

What Can a Prenup Not Do?

A prenuptial agreement can provide significant clarity and asset protection, but it cannot remove the powers of the family court.

It cannot determine arrangements for children

A prenup cannot decide issues of child custody, including where children will live, how much time they will spend with each parent or whether child support should be paid.

Any decisions must reflect the child’s welfare and circumstances at the relevant time.

It cannot guarantee a particular outcome

Prenuptial agreements are not automatically legally binding in England and Wales. The court will consider whether it would be fair to hold both parties to the agreement when the marriage ends.

The document should therefore be treated as an influential framework, not an absolute guarantee.

It cannot leave one party without reasonable provision

An agreement is less likely to carry weight if it protects substantial wealth while leaving the other spouse unable to meet their housing, income or other reasonable needs.

A fair agreement can protect assets while still making appropriate provision for both parties.

It cannot replace full financial disclosure

Both parties should disclose their property, income, pensions, business interests, trusts, investments, debts and other liabilities before signing.

An agreement based on incomplete or misleading disclosure may be given less weight by the court.

It cannot bind third parties

A prenup cannot directly control trustees, business partners, shareholders, lenders, pension providers or family members.

Additional documents may be required where third-party interests are involved, such as a shareholders’ agreement, trust document, declaration of trust or family loan agreement.

It cannot account for every future change

The parties’ circumstances may change through children, illness, career decisions, business growth, inheritance or relocation.

A review may therefore be appropriate after a major change. Revised terms can be recorded through a postnuptial agreement.

Are Prenups Legally Binding in the UK?

The legal position differs across the UK. The following information relates specifically to England and Wales.

A prenuptial agreement is not automatically a legally binding contract under current law. The court retains the power, under the Matrimonial Causes Act 1973, to decide how property, money, pensions and other assets should be dealt with following divorce.

However, the Supreme Court’s decision in the landmark case of Radmacher v Granatino established that the court should give effect to such agreements if they are entered into freely by both parties, with a full appreciation of its implications, unless it would be unfair to do so.

This means a properly prepared prenuptial agreement or postnuptial agreement can have a significant, and sometimes decisive, influence on the eventual financial settlement.

The court will consider both the circumstances in which the written agreement was signed and the practical effect its terms would have at the time of divorce.

No prenuptial agreement is guaranteed to be followed, but certain safeguards can give it greater weight:

Both parties signed voluntarily

Neither party should be placed under pressure to sign. The agreement should be discussed and completed well before the wedding date, giving both people enough time to consider and negotiate the terms.

Both parties received independent legal advice

Each person should instruct their own family law solicitor. This allows both parties to understand their legal rights, the effect of the agreement and how their position may differ from the outcome a court might otherwise order.

There was full financial disclosure

Both parties should provide a clear account of their assets, income, pensions, business interests, trusts, debts and liabilities.

Valuations may also be needed for businesses, property or other significant assets.

Both parties understood the agreement

The wording should be clear, and each person should understand what they would retain or receive if the marriage ends.

Simply signing a legal document is not enough if one party did not appreciate its effect.

The terms are fair

The agreement should protect specified assets while also meeting both parties’ reasonable needs.

Fairness does not necessarily mean dividing every asset equally. It means avoiding an outcome that would leave one party without suitable housing, income or financial security.

The agreement considers foreseeable changes

A well-drafted agreement may explain what should happen if the couple has children, one party stops working, a business is sold, an inheritance is received or the marriage lasts for a particular period.

This can help the prenuptial agreement remain relevant as the couple’s circumstances develop.

Does a Prenup Protect the Wealthier Person Only?

A well-drafted prenuptial agreement should provide clarity and protection for both parties.

The person with greater wealth may want to protect a business, inheritance or property acquired before the marriage. The other party may want certainty about housing, financial support and the effect of future childcare or career decisions.

Both objectives can be addressed within the same agreement.

For example, a business owner may retain their company shares while agreeing that their spouse will receive a property, lump sum or maintenance if the marriage ends. This can protect the business while also providing the future spouse with financial security.

The agreement can also recognise non-financial contributions. One person may reduce their working hours, relocate or step away from their career to care for children or support the other’s business development. A prenup can establish how those circumstances should be reflected in future provision.

Both parties benefit from understanding their position in advance. This can reduce uncertainty and prevent one person from entering the marriage with financial assumptions that the other does not share.

When Is a Prenup Particularly Worth Considering?

Any couple can consider a prenuptial agreement, but it may be especially useful where the finances or family arrangements are not straightforward.

You may wish to take legal advice where:

• You own a business or hold shares in a family company
• You have a property portfolio
• You expect to receive substantial inherited wealth
• You are a beneficiary of a trust
• One party has significantly more assets than the other
• You have children from a previous marriage or relationship
• Family members are contributing towards a property purchase
• You own assets in more than one country
• You have significant pension or investment interests
• Either party has substantial debts or business guarantees
• You expect considerable future earnings or business growth
• You want to preserve assets for children or future generations

International connections also require careful planning. The treatment of nuptial agreements differs between jurisdictions, so coordinated advice may be needed where either person lives abroad, owns overseas property or may relocate during the marriage.

How to Put a Prenuptial Agreement in Place

The process should begin well before the wedding and should be approached openly by both parties.

The main stages are:

1. Discuss your objectives: Identify what each person wants the agreement to achieve and which assets require particular protection.
2. Gather financial information: Prepare details of property, savings, pensions, investments, income, business interests, trusts and debts.
3. Obtain independent legal advice: Each person should instruct their own solicitor.
4. Exchange full financial disclosure: Both parties should receive a clear and accurate account of the other’s financial position.
5. Draft and negotiate the agreement: The solicitors will prepare and refine the document so that it reflects the couple’s intentions and makes suitable provision for both people.
6. Sign the agreement in good time: The document should be completed well before the wedding date, without pressure or rushed negotiations.
7. Review the agreement when necessary: A review may be appropriate after children are born or following another significant financial or personal change. Revised terms can be recorded through a postnuptial agreement.

The work involved will depend on the couple’s finances. An agreement concerning one property and straightforward savings may require less preparation than one involving complex business interests, trusts, overseas property and multi-generational wealth.