If your knowledge of prenuptial agreements comes mostly from the media and movies, then you’d be forgiven for thinking that they’re only for the super-rich and famous. But, more and more people are choosing to enter into these agreements either before they get married (a prenuptial agreement) or after the wedding (a postnuptial agreement).
How do I know if a prenuptial agreement is right for me?
An increasingly common example of when you might benefit from a prenuptial agreement is when your parents have helped you buy a property, or if you anticipate a significant inheritance from them in the future.
A prenuptial agreement entered into before you marry will help protect these assets, so that you can keep them for yourself and your future children. Without one, a court might see those gifts or inheritances as marital assets that should be shared with your spouse.
Similarly, older couples who are marrying for the second or third time, might want to enter into a nuptial agreement so that you can help protect future inheritances for your adult children.
Are prenuptial agreements legally binding?
Although both pre- and postnuptial agreements are not binding in the courts, they are very persuasive – if they meet certain criteria. This criteria includes both parties having signed the agreement willingly and understood what they were agreeing to. Most importantly, the agreement must be fair and meet the needs of both parties and any dependent children.
To show that the criteria has been met, the agreement needs to be reasonably detailed. Both parties should seek independent legal advice and a financial disclosure must be exchanged.
What can be included in the agreement?
The terms of separation can be narrow or wide-ranging, depending on what’s right for you. A nuptial agreement could simply specify the assets that are to be kept separate from marital finances and remain the sole property of one of the parties, or it could go further.
They are often used to set out how the financially stronger party will support the other person if they separate. It could describe things like buying the other person a home mortgage free, paying them a monthly amount to help meet their living expenses, or transferring some of their pension fund to them.
A nuptial agreement can give both parties peace of mind and security in their relationship. This decision doesn’t have to be a negative or unromantic one. Think of it just like preparing a Will or buying life insurance – making decisions ahead of time can help alleviate stress and emotion later on.
The bottom line?
By preparing now, you’ll both have an understanding of what will happen if you were to separate, without having to endure a costly legal battle.
If you think a nuptial agreement might be right for you, don’t be afraid to bring it up with your partner. It might seem like an awkward conversation to have, but ultimately it can provide clarity and security for both of you.
Once the agreement is signed and stored somewhere safe, you’ll probably never need to use it. But having it can give you peace of mind and help you focus on building a happy life together.
Need some advice?
We are committed to ensuring that all of our clients are fully advised about prenuptial and postnuptial agreements. If you would like any advice about your particular circumstances, then please do not hesitate to get in touch with our highly experienced family law team.