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If you are planning to get married or enter into a civil partnership and are looking for some certainty regarding your and your partner’s assets, our experienced family lawyers will be happy to provide legal guidance regarding prenuptial and pre-partnership agreements. We will provide honest, straightforward advice to ensure that your best interests are protected if the relationship breaks down and you separate.
A prenuptial agreement, or prenup, is a document signed by a couple before marriage that sets out what will happen to their property, assets and income in the event they split up. A similar agreement can be made prior to a civil partnership ceremony; this is sometimes referred to as a pre-partnership agreement. The legal issues in relation to both types of agreement are the same.
Family courts are increasingly upholding prenuptial agreements when making decisions in divorce and civil partnership dissolution cases despite them not being legally binding like a commercial contract, for example. The court does, however, retain the right to step in and put in place a different financial settlement on divorce if the situation requires it.
The best statement on this legal position is the below, which is taken from the landmark 2010 case of Radmacher v Granatino:
“The court should give effect to a 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.”
There are a number of reasons for creating a prenuptial agreement, but some of the most common issues covered by them include:
- How a particular asset, such as the family home, should be dealt with in case of divorce
- In what circumstances one party would pay ongoing maintenance to the other
- If one party is very wealthy and would probably be called upon to support the other, what that support would mean in practice - a lump sum, a trust, provision of property, etc.
- An agreement not to share out a particular asset; for example, a property owned prior to the relationship
A prenuptial agreement should not deal with issues such as how much time the parties’ children would spend with each of their parents after the separation. The most successful prenuptial agreements stick to financial issues only.
If you are engaged and are considering entering into a prenuptial agreement, it is never too early to start planning, particularly when there are complex assets involved. It can take some time to gather the necessary information, consider the options and negotiate the terms of the agreement. We would recommend that taking advice on the possibility of a prenuptial should form an early part of the wedding plans. It is very important that the agreement is concluded well in advance of the wedding date - we would advise at least a month before.
In order to give a prenuptial agreement the best possible chance of being recognised by the courts, certain safeguards should be met. These include:
- Both parties receiving independent legal advice prior to entering into the agreement
- A full and frank disclosure of each party’s finances, including assets, liabilities, income and pensions
- Completing the agreement within a reasonable length of time before the wedding or civil partnership
- Making a realistic and reasonably fair agreement
This is a complex and constantly evolving area of the law. If you are considering entering into a prenuptial agreement, early planning is crucial to ensure that the process is as smooth and stress-free as possible, leaving you free to concentrate on planning your wedding or civil partnership ceremony.
When should I make a prenuptial agreement?
To give a prenup the best possible chance of being upheld, it should be completed a reasonable length of time before the marriage or civil partnership ceremony. There is no statutory time period and the case law does not give us a timetable.
Way back in 1998, the Home Office published a consultation document called ‘Supporting Families’. Amongst other things, this document set out some ideas for future legislation on prenuptial agreements, which never actually made it into law. It suggested that a prenuptial agreement should be signed 21 days before the wedding ceremony for it to be legally binding. This is not the law, but this timescale has been cited as an example of best practice.
We would suggest that if you wish to have a prenuptial agreement, this should form an early part of the wedding planning. Even a relatively simple agreement can take some time to put together and it is preferable to get the prenup done and dusted and filed away several weeks, ideally months, before the big day. The sooner you get on with it, the better. However, if you do find yourself running short of time, talk to a solicitor as soon as you can because there may still be time to put something in place.
Do I have to tell my partner about my financial situation if we are having a prenuptial agreement?
It is good practice for there to be mutual financial disclosure before entering into a prenuptial agreement. Without this, it is likely that the agreement would not be upheld by the court in case of a future dispute. The exchanging of financial disclosure should form part of the process of formulating the agreement to ensure that both parties are going into it with their eyes open and, to borrow a phrase from the Supreme Court, ‘with a full appreciation of its implications’.
Can we use the same solicitor to advise us about a prenuptial agreement?
No. The same solicitor cannot act for both of you because this would cause a conflict of interest. Even if you are agreed as to the terms of the prenuptial agreement, these terms will potentially affect the two of you in different ways, so you do need separate advice. Common practice is for one party’s solicitor to draft the agreement, having advised that party on its legal implications, and for the other party’s solicitor to review the draft, advise their client on what it might mean for them and suggest any appropriate revisions.
Who benefits from a prenuptial agreement?
Anyone can enter into a prenuptial or pre-partnership agreement. It is a very personal decision and some people value having a document that sets out what they will do, in financial terms, if they split up in the future, regardless of their circumstances.
Prenups are potentially of greatest importance for couples where there is a difference between their respective financial positions going into the relationship. This would include situations where there has been or is likely to be a substantial inheritance on either side. Alternatively, one party may have built up a business before getting married. Sometimes couples marrying later in life, maybe for a second time, will want to enter into a prenuptial agreement to help protect the financial position of children from earlier relationships.
Another reason for entering into a prenup is as a sort of ‘will’. This does not mean they fear or suspect that their marriage will not last; it just means that if it does, they are able to sort things out with reference to an agreement drawn up at a less stressful, possibly more rational time in their lives.
What is a postnuptial agreement?
A postnuptial agreement, also referred to as a postnup, post-marital or post-partnership agreement, is a document setting out what will happen to a couple’s finances in the event they separate, which is drawn up after they are married or enter into a civil partnership. Many people entering into a postnuptial agreement will revisit it and confirm their agreement to the terms in the form of a postnup. The legal framework is very similar in that they are likely to be adhered to provided they have been drawn up properly.
A postnuptial agreement could be used either as a ‘will’ for the marriage, covering all relevant financial matters, or be drawn up at the point a party to the marriage went into a business venture or acquired an asset with the aim of protecting the asset in the event of divorce.
Given the complexities involved in this area of law, it is important you have the right legal team in your corner to help you make the right decisions every step of the way. At JMW, we provide the direct and pragmatic advice and guidance you need, when you need it. Our aim is to ensure your needs are met and your interests are protected.
Our family lawyers have extensive experience of preparing prenuptial agreements for couples from all walks of life. We make sure you are well supported throughout the process.
Make an appointment at one of our offices
1 Byrom St,
Tel: 0345 872 6666
100 Old Hall St,
Tel:0345 872 6666
36- 37 King Street,
Tel: 0203 675 7575