Protect your assets prior to marriage - the rise of the pre-nuptial agreement
A Pre-Nuptial Agreement is a contract entered into by a couple prior to their marriage and determines who will get what in the event of their marriage breaking down. The agreement can be drafted with flexibility to meet each individual set of circumstances. Some think that entering into such an agreement is unromantic or might undermine the relationship, but a properly drafted, straightforward agreement can protect both parties and can actually prevent future conflict.
As is well publicised, a Pre-Nuptial Agreement is not legally binding and hence many question the value of them. In recent high profile divorce cases where no Pre-Nuptial Agreement existed the wealthy party has paid a significant sum of money to the ex-spouse despite the brief length of the marriage.
Following recent decisions in cases where Pre-Nuptial Agreements have been put to the test, it is clear that the Court is attaching increasing importance to the terms of Pre-Nuptial Agreements. It should not be assumed, therefore, that a Pre-Nuptial Agreement will not protect one's assets.
In order to give a Pre-Nuptial Agreement the best chance of success a number of factors should be complied with:
- Both parties should have independent legal advice.
- Both parties should fully and frankly disclose to one another their financial means.
- The agreement should be entered into well in advance of the wedding (normally a minimum of 21 days before the marriage).
- Provision should be made for any children.
If you are not married and are contemplating living with your partner then you might want to enter into a Cohabitation Agreement to protect your assets. This serves the same purpose as a Pre-Nuptial Agreement in that it formally records what will happen to your assets if your relationship were to come to an end. The same criteria should be followed to give it the best chance of success.
If you are considering entering into a Civil Partnership (the union of same sex couples) then you might wish to protect your assets by entering into a Pre-Civil Partnership Agreement, following the same criteria.
If you have married then all is not lost and you can seek to protect your assets by entering into a Post-Nuptial Agreement. Again, recent case law suggests that although not automatically legally binding, the Court will give serious consideration to such an Agreement.
Legal advice should be sought by anyone considering entering into such an agreement as a Court is very unlikely to uphold the terms of a home made agreement. Such an agreement should be considered by anyone who has acquired assets prior to their relationship and wishes to protect them.
Samantha Jago
Family Solicitor