A steadily increasing number of couples choose to enter into pre- and post-nuptial agreements in order to safeguard assets in the event of marriage breakdown. These conversations and agreements don’t signify the loss of love; rather, they reflect practicality and foresight for those who understand the risks and consequences involved.
A nuptial agreement is a legal contract that couples enter into with the aim of recording how financial matters will be handled in the event of divorce or dissolution of the marriage, providing them with clarity and helping to avoid disagreements should the relationship fail. Therefore why in the UK, do approximately 89% of married or civil-partnered couples not have a prenuptial agreement in place? This may be due to a belief in the stability of a relationship, but sometimes its because the conversation may be seen as unromantic and create unnecessary tension. We encourage couples to have these discussions early on, to avoid the financial uncertainty in the event of divorce or dissolution.
Although often seen as a tool for celebrities and the ultra-wealthy, prenuptial agreements can also safeguard pre-marital assets – especially relevant for those who marry later in life, as well as inherited wealth. This is why many parents encourage them and sometimes even cover the costs.
What is the difference between a pre-nuptial and post-nuptial agreement?
The difference is in the timing of when the agreement is made. A pre-nuptial agreement is made before the marriage, a post-nuptial agreement is made once the couple are married.
Nuptial agreements usually deal with the following:
- Protecting pre-marital wealth, savings and investment and inherited assets
- How assets will be divided upon divorce
- How assets will be treated during the marriage
- How income will be treated during the marriage
- Protect business or trust assets
- Record whether either party will receive any maintenance from the other, and if so, for how long
Why should I get a nuptial agreement?
If you are planning on getting married or entering into a civil partnership and would like certainty as to how you and your partner wish your finances, property and assets to be divided in case of divorce or dissolution, you should consider a pre-nuptial agreement. If you are already married or in a civil partnership, a post-nuptial agreement can help achieve this. At Wedlake Bell, we are regularly instructed to prepare nuptial agreements for a range of clients, from professionals working in the City of London to those who wishing to safeguard inherited assets, and our expert team can help tailor them to your specific needs. Some recent examples of how we have helped clients achieve their objectives include:
- Ringfencing a substantial investment portfolio acquired prior to the marriage and income derived from it
- Protecting a client’s technology company founded prior to the marriage
- Advising clients on both pre- and post-nuptial agreements to protect contributions to the purchase of property, particularly where one party’s contribution has been substantial
Are nuptial agreements binding?
For a nuptial agreement to stand the best chance of being upheld, certain formalities have to be followed, namely that the agreement is fair, that each party has had independent legal advice and provided financial disclosure, that no undue pressure has been exerted on either party, and in the case of pre-nuptial agreement, that it is signed at least 28 days prior to the wedding.
Despite their growing acceptance, nuptial agreements are still subject to scrutiny by the courts, which is why it is important they are executed following the formalities outlined above. Whilst they are not automatically enforceable, the legal framework in England and Wales has evolved to give them greater weight provided they are entered into freely and fairly. Nevertheless, growing numbers of couples are choosing to enter into these agreements to regulate their financial affairs in the event of relationship breakdown in order to avoid litigation which can be potentially emotionally and financially costly.
How Wedlake Bell can help
Wedlake Bell has extensive experience in preparing and advising on prenuptial agreements. We can ensure the situation is handled politely and collegiately, to ensure love is not lost during the process. If you think a nuptial agreement would be helpful in safeguarding your interests, or you would like any further information about how they work please contact Andrew Miles or another member of the Family team.
Andrew is a Solicitor in the Family Law team at Wedlake Bell in the City of London. The team are experts at advising clients in relation to nuptial agreements, as well as all other family law related matters.