Prenuptial agreements – Bureaucratic and Unnecessary or Good Forward Planning?
With Pre-Nuptial Agreements (‘Pre-Nups’) becoming more popular, particularly with celebrities, we are being asked about them more frequently. In general they still seem to have a “marmite” effect.
People either love them or hate them.
So when every engaged couple is hoping for a “happily ever after” and are busy preparing for their special day, why should they start thinking about preparing a document that involves time and costs, and ultimately seems to be anticipating the end of the marriage before it has begun?
Some couples find that having a Pre-Nup Agreement actually helps their relationship during their marriage so that separation is less likely. They have the opportunity at an early stage to discuss their expectations and decide on how they will own their assets if they were to separate. It gives couples certainty and can help them avoid arguments in the future. This is particularly crucial where one or both of the couple are coming to the marriage with their own assets, such as land or a farming business or a share in land or business, and expect these assets to stay in the family.
Another key practical effect of having a Pre-Nuptial Agreement should not be ignored; by having a formal agreement in place, for many separating couples court proceedings will simply not be needed, because they have already agreed a settlement with which they are happy, saving unnecessary legal costs and acrimony, and benefiting their family in the long run.
Without a formal Pre-Nup Agreement in place when they marry, the couple is leaving it to have their finances on any separation dealt with in accordance with the law made by Parliament and interpreted by judges taking it out of their own hands, and resulting in consequences that they may not have expected or wanted. For example, land or a farming business that has passed through one person’s family for generations can still be subject to claims by the other person, resulting in possible sale or transfer of part of that land or business.
We are still waiting for Parliament to change the law relating to Pre-Nuptial Agreements, now officially known as Pre-Marital Agreements, to make them automatically binding on a separation.
However, in the meantime, the decisions of judges in recent cases are still pointing towards judges giving effect to well drafted Pre-Nuptial Agreements, as long as they are not unfair, when deciding the settlement in any proceedings between divorcing couples about their financial matters.
Having decided that a Pre-Nup Agreement is a good idea, it can be daunting to think about discussing this with a fiancé or fiancée. Over time, such agreements are likely to become more common place, but for now one of the best ways of thinking about a Pre-Nup is by likening it to insurance policies that you already have in place. You wouldn’t own a new tractor without insuring it. You hope you never need to rely on that insurance, but you have it in place, just in case, for peace of mind.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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