Pre-nups, have been popular for years with the rich and famous. There is now a growing trend among those with more modest means who are keen to protect their interests before marrying or entering a civil partnership. Elizabeth Cookson, family lawyer at Berry & Lamberts Solicitors outlines key considerations if you are thinking about entering into a pre-nup.
Do I need one? Before deciding whether a pre-nup is right for you, you need to think about what it is you are seeking to protect. For example, couples who have been married before may have assets from their previous relationship that they wish to preserve, such as the sale proceeds from the former matrimonial home. Alternatively, one partner may be entering into the marriage or civil partnership significantly greater wealth than the other and may, therefore, be keen to protect their existing financial position. This is often the case where, say, personal wealth is connected with a family business.
How do I ask for one? Honesty is the best policy; nobody knows what the future holds and while everyone hopes that their relationship will stand the test of time, there are no guarantees. Try raising the subject as part of a general discussion about the implications your marriage or civil partnership will have on your financial arrangements as a couple. This could involve discussing the need to update your wills and think about the ownership of the property you will live in. If your partner can appreciate the merits of thinking about the financial consequences of your relationship, then it should not come as such a big surprise if, as part of a general discussion, you raise the possibility of a pre-nup.
The same applies if you are a parent and wish to raise the subject with your child – if you can discuss the financial impact their marriage or civil partnership will have on the family more widely, you stand a better chance of asking them to consider how a pre-nup might protect them.
How do we agree the terms? There are a number of ways to agree the terms of a pre-nup. One option is to sit down with your partner, or your child and their partner, and agree things between you; however, this can be difficult, particularly if you are the wealthier party. Another option is to meet with a mediator who can assist you in negotiating the terms. In either case, you will need legal advice and help with recording the terms in a formal written agreement.
Will the courts take notice of a pre-nup? The courts in England and Wales will take the terms of a pre-nup into account when deciding how assets should be divided-up following divorce or dissolution of a civil partnership. To increase the prospects of the pre-nup being upheld, the following should be kept in mind:
Even if the agreement meets the above criteria, before relying on its terms the court will also consider:
Pre-nups can be a very useful way of protecting your financial position prior to marrying or entering a civil partnership, but you need to think about the terms carefully and take legal advice to ensure that you comply with all the necessary requirements.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.