Imagine that your wedding is just a couple of months away – the happiest day of your life – and your lawyer friend says you should be thinking about your divorce. For most engaged couples, thinking about divorce before you’ve even tied the knot might seem somewhat depressing.
However, pre-nuptial agreements can establish a sounder basis for the start of a marriage as it can get into the open and address some of the thorny and often unspoken ‘what ifs’ that can undermine a relationship.
Why might you want a pre-nup?
Pre-nups are the only way to try to protect your pre-marriage money upon a divorce, which means you should consider one if you have more savings/investments than your partner. For example, pre-nups are good at protecting money you have inherited or from family trusts, as well as protecting business assets.
You should also consider a pre-nup if you have a child from a previous relationship whose interests you wish to protect, or if you or your partner are not from England or Wales.
Pre-nups can also reduce stress and legal fees, as you will have already decided what should happen in the unlikely event of you divorce.
Are pre-nups binding?
In short – no. A pre-nuptial agreement is not 100% legally binding, however a landmark ruling in the Supreme Court in 2010 showed that a pre-nuptial agreement will be considered and may be acted upon should a marriage break down.
Pre-nups are often taken in to account when deciding how to divide assets so that the outcome is fair for both sides, so in that sense they are definitely worth doing.
Do pre-nups have specific requirements?
Yes, several requirements that must be met: Firstly, both you and your partner must allow for full disclosure of your financial situation. You will both need legal advice from different solicitors. The agreement needs to be signed at least 21 days before the wedding to avoid any allegations of pressure to sign, and signatures must be witnessed. The agreement needs to be fair, meaning that it needs to meet both of your basic needs in terms of housing, capital and income on a divorce.
Other consideration before entering a pre-nuptial agreement
It is important to talk with your partner about what you would like to happen if you separate and, in particular, you should consider the following factors: what should happen to your family home, money or property that you brought into the marriage, money inherited during the marriage and money received from trusts, money held in joint accounts and property owned jointly, how you would split personal belongings, money saved during the marriage, pensions, debts, any maintenance that the other may need and what would happen if you died during the marriage.
You should always take legal advice to have an agreement drawn up on. It is also important not to rush into anything or leave it to the last minute.
Reviewing the agreement regularly is also important, especially when there is a significant change in the relationship such as having children or moving abroad.
The good news is that the pre-nuptial agreement process is simple. This is a summary of the procedure for entering into a prenuptial agreement:
- If you decide to complete a prenuptial agreement, you must enter into this at least 21 days before the wedding.
- Before signing any agreement, both parties must give full financial disclosure.
- The weaker party must not put any pressure on the stronger party.
- Both parties must receive competent independent legal advice.
- After the wedding, you also have the option of entering into a post-nuptial agreement, which can help reinforce and support the terms of the pre-nuptial agreement.