Pre Wedding Stuff: What Is a Prenuptial Agreement & When Should You Get One?
Prenuptial Agreements are documents drawn up between a couple planning to marry. The document serves as a contract that includes details of how assets and finances should be divided should your impending marriage end in the future.
They may stipulate how finances should be managed during the marriage, what happens to financial assets if one spouse passes away and/or what assets (e.g. pensions, property) should and should not be split if you divorce. In this article, we will look at what a prenuptial agreement is and help you decide whether or not it is the right route for you.
Are prenuptial agreements legally binding?
Prenuptial agreements, although not legally binding in the UK, are often upheld by the courts if they meet the necessary criteria. If your prenup can clearly show that both parties have entered openly into the agreement there is a greater chance of it being enforced by the court. The court will need to deem that it’s fair and if there are children involved in the divorce, that there is reasonable financial provision stated for them within it. It is possible for someone to contest a prenup but there need to be clear reasons why it should be voided.
Reasons you should consider getting a prenuptial agreement
Once you are married, your joint assets become matrimonial assets and in effect, become one financial entity. Having a prenup will go some way in preventing claims on pre-marital assets you wish to protect. So, in what circumstances is it wise to get a prenuptial agreement?
Here are some examples:
- If you own or have certain assets that you specifically want to protect in the event of a divorce.
- If you have a family business you want to ensure you keep, or have a stake or shares in
- If there is considerable disparity between the financial position of you and your partner
- If you are considering a second marriage and there are assets you own from a first marriage
- If there is a potential risk of insolvency for one of the partners
- If you are a widow or widower and want to protect assets from your deceased spouse
- If you are concerned that if the marriage breaks down, you could end up spending lots of money on lawyers’ fees and court battles
- If there are children from a previous relationship you want to protect financially
- To protect yourself from being responsible for any debt accrued by your partner before you married
- To protect an inheritance you may receive
- To ensure that any non-financial contributions such as looking after children is established
Note that when you are putting together a prenup, you will need to ensure matters are carefully discussed, and thought through by both parties to reduce ambiguity in the final agreement. What is considered fair by one party, may not be so for the other.
How to broach the topic of a prenup with our partner
Talking about finances in such detail is not a conversation any of us want to have. But as we see divorce rates rise, having an agreement does make sense for many. Try to get to the conversation about finances early on in your relationship, and not the day before you both walk down the aisle. Although it’s not a first date chat, as your relationship develops you are likely to be having more pragmatic conversations about where you will live, work and what money you both have, so it won’t seem out of context.
Choose a place with no distractions and where you both feel most relaxed. Remember to be honest, highlight any concerns sensitively and ask questions about how your partner feels about things too. Try to have an even exchange of thoughts and ideas and pitch it as a team effort. Don’t go into the talk with a list, speech or any preconceived ideas or assumptions.
How difficult is it to get a prenuptial agreement?
The difficulty related to getting a prenuptial agreement can depend on the nature of your relationship to some degree. Some partners share the belief that prenuptials are fair and they are happy to have one drawn up. In some instances, you may find resistance to the suggestion of it with your significant other and it may take time to agree on things.
There is no official form to fill in, so when you have decided on things, you will need to get your prenuptial agreement drafted by a legal professional. During the process, you will be asked to provide details of all your joint financial assets. This includes pensions, all properties, business details, investments and savings. The document will specify how these assets are to be split in the event of a divorce.
When is a prenuptial agreement considered invalid?
There are a number of instances where a prenup is viewed as invalid in the eyes of the courts. A prime example is if it can be proven that someone was pressured into signing it or were not in a mentally fit state to sign it. Another instance may be if one of the parties did not seek the correct legal advice, or it may be that one of the parties did not fully disclose their financial position. Just like a will, it is possible to amend a prenup agreement as situations and dynamics within a marriage can often change over time.
Although prenups can feel an insensitive subject to approach prior to getting married, it’s worth remembering that marriages, as well as being a signal of your love for each other, are also legal contracts between you and another person. During the course of your marriage, you will have to navigate numerous practical obstacles and incidents, so it’s helpful to see a prenup as one of those. It can be detrimental to the health of some marriages if a prenup is not in place as uncertainty about finances can lead to problems and conflicts further down the line.
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