Are you thinking about popping the question this Christmas? Or do you think your partner may ask you? If it looks like engagement is on the horizon, many congratulations!
Once the ring has been chosen and you’ve either asked the question or said “Yes!”, you are bound to be swept away with all the fun and excitement of planning a wedding. However, it’s important you are well prepared for the financial implications of getting married.
When you marry, you enter into a contract, which can only be broken by involving the family court. Unfortunately, there is no such thing as a ‘quickie divorce’; currently it takes over a year for a divorce to be finalised. Of course, no one wants to think their relationship will end, but it’s wise to be informed of the implications of what you are signing up to prior to tying the knot.
As part of your marriage contract, you are subject to law which states that you are more than likely going to be sharing half of everything you have with your spouse. This includes savings, investments, pensions and property. It does not necessarily matter how you acquired these assets, be they gifts or inheritance, or even if you accrued them prior to meeting your spouse.
Following divorce, you may also be liable to pay your spouse maintenance for many years if they cannot afford to support themselves.
If you would rather not give away half of all you have, you should think seriously about a pre-nuptial agreement.
What are the benefits of a pre-nuptial agreement?
- It is the only way to try to protect your money upon a divorce
- It is very good at protecting money you have inherited or family trusts
- It can protect your business
- It can ensure your children from a previous relationship are protected
- If can help if you and your partner are from different countries and the laws are different
- It can help reduce stress and legal fees upon a separation because you have already agreed what you are going to do
Are pre-nuptial agreements binding?
No. However, they are often taken into account by the court when deciding how to divide assets between ex-spouses. As such, they are definitely worth doing if you have something to protect.
What are the requirements?
- Full disclosure of you and your partner’s financial situation
- You and your partner must take legal advice from different solicitors
- You both need to sign the agreement at least 21 days before the wedding to avoid allegations of pressure to sign
- The agreement needs to be fair, meaning it must meet both of your basic needs in terms of housing, capital and income on a divorce
- Your signatures need to be witnessed
Broaching the subject of a pre-nuptial agreement can be hard, but it’s important to talk with your partner about what you would like to happen should you separate. Consider what should happen to your family home, money and any other property that you brought into the marriage. Also consider money inherited during the marriage or money received from trusts, held in joint accounts and any property you jointly own. Decide how you would split personal belongings, money saved during the marriage, pensions, debts, and any maintenance the other may need. Also consider what would happen if one of you died.
To draw up an effective agreement, it’s important to take legal advice. These agreements always take longer than you think, so don’t leave it to the last minute.
If you do go ahead with a pre-nuptial agreement, make sure to review it regularly, particularly when there is a significant change in your relationship such as having children or moving abroad.
For further information please call or email Victoria Walker, partner at Moore Blatch, based in the Richmond office.