What type of people typically approach you to help them with a prenup?
Despite media perception, nuptial agreements are by no means exclusive to the ultra rich and famous. Increasingly people from all backgrounds are choosing to enter into them – either before they get married (a pre-nuptial agreement), or after the big day (a post-nuptial agreement). We generally find though that people fall into one of three main categories:
(1) younger couples marrying for the first time whose parents have considerable wealth, and they want to protect funds their parents have already gifted or may gift in the future – whether for their own benefit or for their future children.
(2) older couples where one or both of the parties have been married before and they want to retain clarity over how their assets will be owned in order to bring peace of mind to their adult children and protect future inheritances for their grandchildren.
(3) couples of any age where one party has worked extremely hard to develop a business that they understandably want to ring fence and protect from a divorce.
But are prenups binding in this country?
Nuptial agreements are not binding on the Family Courts of England and Wales but they are highly persuasive and are likely to be upheld by the court if they satisfy some core criteria, the most important of which are that:
Neither party was forced into signing the agreement
Both parties understood the terms and their effect
And most importantly, it’s fair to uphold it, meaning that the terms meet each of the parties’ needs, and the needs of any dependent children of the family
What does a prenup tend to include?
In order to evidence that the core criteria has been met to persuade a court to uphold it, the contract does need to be pretty detailed, independent legal advice obtained by both parties separately, and a summary of the parties’ respective finances exchanged. However, the provisions on separation can be as narrow or wide ranging as people wish. A nuptial agreement could simply specify 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 and explain how the financially stronger party will support the other person if they separate – such as buying the other person a home mortgage free, paying them a monthly amount to help meet their living expenses, and transferring some of their pension fund.
How would you recommend talking about a prenup with a partner when it feels like a taboo topic?
Since a nuptial agreement has to meet people’s needs to be upheld anyway, a nuptial agreement shouldn’t be seen as a completely unromantic and mercenary exercise. In our experience, it can often be the financially weaker party that has requested the prenup so it’s not just about the party with the wealth trying to avoid sharing it. It can be a very positive means for both people in a relationship to achieve security in knowing that they are marrying for the right reasons, and for the financially weaker party to guarantee that if the worst comes to the worst, they will be looked after without having to endure a costly and stressful legal battle to get that financial support. In the same way that you would prepare a will, lasting powers of attorney and buy life insurance, a nuptial agreement is there to provide clarity and make big decisions in advance for one of life’s darkest times. Chances are that once your nuptial agreement is signed and filed somewhere safe, you’ll never need to rely on it. However, it makes a lot more sense to make big life decisions when you love and respect the other person, are well rested and have clarity – rather than when you are potentially overwhelmed by emotion and stress.
What helps to make a nuptial agreement an amicable process?
As with any difficult conversation it’s best to be open and honest as soon as possible if you want a prenup. Try not to wait until the last minute to raise the topic. Not only could waiting too late lead to hostility but it could also undermine the weight a prenup is given by the courts. If you can, have your first meeting with a solicitor together – when drafting a prenup for the financially stronger party, we are always happy to meet the couple together. It ensures that the document is drafted from the outset in a way that both are comfortable with the terms. Also ask your lawyer to provide recommended solicitors for your partner to take their independent legal advice from. If they have a good relationship with the person they are referring to, it will make a huge difference and ease the process.
What if I don’t have a prenup?
It’s very possible that without a nuptial agreement, the Family Court will view any gifts received by one party during the marriage as assets that should be shared equally between both parties. Inheritances are treated slightly differently but the court will use them to meet the needs of both the parties if there is a need. The family home will almost certainly be a marital asset to be shared 50/50 regardless of who paid what towards it, and whose name it’s held in. Businesses can also be up for grabs if they have been actively worked on and developed during the marriage. The ultimate aim of a prenup is to reduce the scope of the many arguments that can arise on a divorce, and provide as much clarity as possible in order to bring reassurance and peace of mind to the parties and their wider family.
If you would like to learn more about how a nuptial agreement could benefit your circumstances, please contact Laura Mortimer on 01865 692 159 or at [email protected]