Getting married in Chichester, Alton or the surrounding areas this year? Will a pre-nuptual agreement be part of your wedding planning? If you think pre-nuptual agreements are just for the rich and famous, then think again. Whilst you’re planning your lives together, a pre-nup can be a beneficial legal document when settling your finances should the marriage break down in the future.
Historically, pre-nuptial agreements (also referred to as pre-marital agreements) have often been thought of as a contract for the rich and famous. We will all be familiar with celebrity divorces where the press have highlighted both the existence and non – existence of pre-nuptial agreements. As a result of this, prior to the last decade, the presence of a pre-nuptial agreement would only tend to enter the headlines if it was (a) a very public divorce of a rich and famous couple and (b) geographically tended arise from outside of the UK jurisdiction.
Over the course of the last ten years, it is certainly the case within the UK that pre-nuptial agreements are no longer limited to the rich and famous. They are already commonplace in many countries and have been long recognised in America and European countries but the UK have taken a little longer to recognise their relevance to assist in settling finances when a marriage breaks down.
Overall as the attitude towards marriage and divorce has evolved, so has the attitude towards prenuptial agreements changed. Following a landmark case in the UK in 2010, the English Courts have certainly changed their attitude towards pre-nuptial agreements. It since follows that considerable weight will be given to any pre-nuptial agreement upon the subsequent marriage breakdown provided certain pre-requisites are adhered to when drafting and entering into the agreement in the first place.
Given the more common place existence of such an agreement, it also follows that asking for a pre-nuptial agreement is no longer taboo. People are more comfortable discussing finances and the possibility of divorce and many agree that given the potentially life changing nature of a divorce, it is sensible to prepare for such an event.
The courts are giving more consideration to prenuptial agreements when making financial orders. My instructions of drafting pre-nuptial agreements has certainly increased enormously over the last few years and these instructions range from clients entering into a second marriage, wishing to protect their assets to clients who have a huge disparity between the wealth which both parties are bringing and those clients who have existing ‘family’ wealth/inheritance or business property which they wish to protect for their extended family and also future generations.
So when considering whether a pre-nuptial would be a beneficial legal document to you, here are some points to consider.
What is a Pre-nuptial Agreement?
It is a contract that parties enter into in contemplation of marriage. It agrees and sets out how their financial situation might be governed if the marriage subsequently breaks down.
Is a pre-nuptial agreement legally binding?
The truth is that pre-nuptial agreements are not binding on a court of law (i.e. the court does not have to follow the exact content of the agreement). However, they are increasingly used by Judges and Courts when deciding what type of financial settlement or order to make upon divorce. Judges now view these agreements as a useful indicator of the couple’s intentions at the time they entered into their relationship.
Are Pre-nuptial Agreements unromantic?
Whilst it could be argued that a pre-nuptial agreement is somewhat of an ‘insurance policy’. It follows that it does take some romance away from the excitement of planning a wedding. No one likes to be pessimistic when entering into a long term relationship or a marriage but it may be better to be financially safe than sorry. These discussions may be embarrassing to begin as most people are romantic at heart and want their relationships to last. They do not want to consider financial arrangements when they are falling in love. Divorce is probably the last thing on their mind. They may even resent the very idea of reducing their feelings onto a piece of paper. But for those who have been married, they will tell you that love, although an essential ingredient is not the only factor in building a successful marriage. Pre-nuptial agreements can control and govern all of those other more material factors, leaving you to concentrate on planning your all important day and future together!
What are the pre-requisites for a Pre-nuptial Agreement to be given weight by a Court in a subsequent argument?
• It is vital that both parties receive independent legal advice. If one party is unable to pay for such legal advice, the other party may be required to meet the cost.
• Full and frank financial disclosure is also required from both parties and recorded in the agreement;
• The agreement must be entered into in sufficient time to avoid any suggestions of undue influence or pressure usually three to six months before the marriage ceremony.
What are the advantages and disadvantages of entering into a pre-nuptial agreement?
1. Prenuptials encourage parties to discuss finances from the outset and can help
resolve financial issues before the marriage has started.
2. Prenuptial agreements are also a good way of protecting family assets or
property acquired before the marriage.
3. They can also help provide financial security if there are children from
previous relationships or marriages. As long as such provisions are fair, they will be upheld by the court.
4. Prenuptial agreements can also save time and costs. Having a prenuptial
agreement which is valid and fair will help avoid long financial settlement proceedings in the event a divorce or breakdown occurs, thus saving legal fees and expenses, tension and heartache.
5. One of the disadvantages of having a pre-nuptial agreement is that vulnerable
parties may not benefit as much from these agreements as during negotiations, they may allow themselves to be forcefully persuaded or cajoled into agreeing something that is not in their best interests. This is why it is important to seek independent legal advice before signing such an agreement, to ensure that you can receive the best possible outcome if your marriage breaks down.
6. Another point to consider is that as the marriage progresses, key factors may
change. For example the parties may have had children together or the income of the parties may have changed dramatically. In these cases the pre-nuptial may no longer reflect the current positions of the parties and becomes outdated. Therefore it is important to instruct solicitors to draft prenuptial agreements to ensure that these possibilities are accounted for in the pre-nuptial and allow for the agreement to be reviewed.
How do I find out if a Pre-nuptial Agreement is right for me?
The first step would be to sit down with a qualified solicitor who specialises in this area of law. It is always worth bearing in mind that if the pre-nuptial agreement is valid and is entered into properly, it is likely that the Courts will use it or at the very least follow it as a guide to what type of financial settlement to make. Therefore, it is arguable that pre-nuptial agreements are now essential for your financial security. This reason alone may therefore determine whether or not a pre-nuptial agreement is right for you.
Do, however, bear in mind that the courts will always have the final say when deciding upon financial settlement in divorce cases. This is why it is so important to seek independent legal advice when entering into a pre-nuptial agreement.
What is the likely cost of a Pre-nuptial Agreement?
Cost would be determined by the extent of the work involved in drafting it and the complexity of the assets involved. For example, if there were assets overseas, it might be necessary for there to be a mirror agreement dealing with the asset in the country in which it is held. This may add to the overall cost and early advice should be sought
What if I am already married but would like an agreement put in place?
It is possible to enter into a Post-nuptial agreement (‘post-nup’) after marriage, while a couple are still living together and allows a couple to plan financially should their marriage breakdown. The law relating to pre-nuptial agreements also applies to post-nuptial agreements, the only difference is that a post-nuptial agreement is entered into after marriage whereas a pre-nuptial agreement is arranged before marriage.
For more information on pre-nuptial agreements in Chichester, West Sussex or Alton, Hampshire call our Alton office on 01420 544273 or our Chichester office on 01243 850860.