A Complete Guide To Prenuptial Agreements

Marriages can last a lifetime. Realistically, however, there is no guarantee about this. Unromantic as it might seem, accepting this fact and working with it can make life a whole lot easier for everyone in the long run.

Prenuptial agreements can be a wise and safe investment of your time and resources if you feel certain assets need to be protected. Just because you’re thinking of a prenuptial agreement, it doesn’t mean you don’t trust the other person, but relationships can change over time and so have that security blanket will give you peace of mind should you find yourself getting divorced.

Prenuptial agreements are contracts

Technically, UK law does not (yet) recognize the concept of a prenuptial agreement. It does, however, very much recognize the concept of a contract. What’s more, Radmacher v Granatino 2010 led to judges issuing guidance on what conditions need to be met for a prenuptial contract to be valid.

• Both parties had their own legal counsels
• Both parties made full disclosure of their financial standing
• The agreement is fair to both parties and any children involved
• Both parties entered into the agreement freely.

The Law Commission recommends that prenuptial agreements should be signed at least 28 days before the wedding to avoid any suspicion of a party being pressured into signing one.

For completeness, meeting these criteria does not guarantee that the prenuptial agreement will be upheld. It does, however, mean that the agreement is very likely to be upheld unless a judge has a compelling reason to set it aside.

Prenuptial agreements can be updated

Prenuptial agreements can only be set up before a couple are married. They can, however, be reviewed and, if necessary, replaced with postnuptial agreements. These in turn can be reviewed and updated with new postnuptial agreements.

It can be advisable to review prenuptial/postnuptial agreements on a regular basis. This ensures that they stay a valid reflection of the current state of the couple’s assets and income. As a minimum, prenuptial/postnuptial agreements should be reviewed after any major life events, particularly the birth of children.

In simple terms, time moves on and either your prenuptial/postnuptial agreements move on with it or they become obsolete and end up being set aside if you divorce.

Prenuptial agreements are tailored to each couple

A prenuptial agreement can include anything of real or potential value, including negative value. This might be:

• Income
• Savings and debts
• Property
• Investments
• Personal belongings

It can include business assets as well as personal ones. It can also cover income and assets a person might receive in the future such as a pension or an inheritance.

Why prenuptial agreements can be useful

The sad reality is that divorces vary from “conscious uncoupling’s” to viciously acrimonious splits. Bluntly, you’re only going to know where your divorce falls on this spectrum if it actually happens. It can therefore make a lot of sense to work out at least a basic framework for a financial settlement when you’re both on good terms and calm.

If both of you are entering into the marriage with minimal to no assets and liabilities, then a prenuptial agreement may be irrelevant. Basically, if you don’t have anything, there’s no need to worry about how to split it in the event of a divorce. That said, if you have the expectation of your financial situation improving in future, e.g. through an inheritance, then a prenup may be advisable.

On the other hand, if even one party is entering into a marriage with any sort of assets (or liabilities), then it’s probably advisable to have a prenuptial agreement. In fact, if either party has assets (or liabilities) and children from a previous relationship, then a prenuptial agreement may be essential to protecting assets you want them to have at a later date.

Please note, however, that prenuptial agreements cannot be used to determine custody and maintenance arrangements for children. These would have to be agreed upon at the time of your divorce. You can and should, however, make a will that specifies care and maintenance for children in the event of your death.