Pre-Nups - not just for celebrities and the super-rich!
- AuthorAnna Robinson
COVID-19 has impacted all aspects of our lives and as we get into the ‘new normal’ we’d like to say congratulations to those couples who have weathered the storm and got engaged during lockdown, and to recognise those couples who have had to take the difficult decision to postpone their celebrations until next year or beyond.
Whatever your situation, and however far ahead you are with planning your wedding, the one thing that you probably haven’t given a second thought to is whether you should enter into a Pre-Marital Agreement (pre-nup).
These documents are not just for celebrities and the super wealthy, and really should be considered where one or both partners have their own assets that they might want to protect. We live in an age where people often come to a marriage later in life, with their own properties or children from previous relationships. From a legal perspective it would be sensible to ensure that the tricky bits are ironed out before the wedding, as it can be a lot harder (and more expensive!) to have to unpick things afterwards if the relationship has broken down.
The legal rules about Pre-Marital agreements come from the laws that also apply in Divorce, however guidance is also taken from key cases where the court has said that the terms of an agreement should be honoured if it has been freely entered into by each person, that they both appreciate the implications and where it is deemed to be fair.
Why have a Pre-Nup?
We should say here that entering into a Pre-Nup does not mean that you are more likely to get divorced! It is a useful way to outline what would happen if the worst case scenario were to happen and your marriage were to come to an end. They are useful:-
- If one of you has a substantially greater income or capital;
- If there are assets that were owned prior to the marriage (for example if there is inherited wealth or a family trust);
- If you want to separate matrimonial or non-matrimonial assets (for example if there are business assets owned by one of you prior to the marriage;
- If you have children from a previous relationship; and/or
- There are assets outside of the UK
Is it legally binding?
In England and Wales pre-nuptial agreements are not strictly binding in the event of a later divorce, but the terms of a pre-nuptial agreement may be decisive in the event of a dispute that is dealt with by the court unless the effect of the agreement would be unfair. Timing is key, and it is important that you are each given the chance to consider and reflect on the agreement, and that you have the opportunity of taking your own independent legal advice.
It is also normal to include reviews every few years to ensure that the agreement still works for you both and your circumstances. You may have had children for example, or one of you may have had health issues which could affect your earnings.
What can it include?
A Pre-Nup is very much tailored to your personal situation and can include a whole variety of things, many of which couples usually think about when deciding what should happen after their relationship has ended.
Typical questions would be:-
- What happens to the family home?
- What happens if we buy more properties?
- What should we do with any debts?
- What happens to our pensions?
- What kinds of arrangements should be in place for our children?
- What happens if we become unwell or if we pass away?
How much will it cost?
The cost of the document will depend upon the assets involved and the advice that we need to provide. We are pleased to offer bespoke costs on a fixed fee basis. Please contact us if you would like more information by emailing Anna Robinson or call us on 0800 118 1500.
It might be the last thing on your mind right now but putting something in place ahead of your wedding to deal with the ‘what ifs’ seems even more pertinent now than it ever did before . . .