Pre-nuptial agreements: How do they work in the UK?

When any couple gets married, they want to believe that it is forever, but sadly the current divorce rates suggest that this is not always the case. That has brought about the need for pre-nuptial agreements. Once the territory of the rich and famous, there are now more and more people who are looking at this option as a way to protect their assets and avoid much of the bitterness and complications that come in the event of a split.

Whilst pre-nuptial agreements first came to the fore in the USA, they have now made it to the UK as well. In this article, Valens Solicitors we take a look at what a pre-nuptial agreement is and how it works in this country.

What is a pre-nuptial agreement?

When a couple get married, the only legally binging document is the marriage certificate itself. Should a divorce then come about, there are likely to be long and often angry debates over how the financial assets from the relationship should be divided. That is why pre-nuptial agreements are now being used.

These are put in place before a marriage is entered into and set out how any assets should be divided in the event of a divorce. Once you are married, any assets that you owned may become matrimonial assets which are thrown into a pot which will be shared between you and your partner when you split.

A pre-nuptial agreement should record the ownership of any assets at the time of the marriage, and any assets, such as inheritance that are expected to be received at a later day. It should cover things such as property, income, debt and any other assets which as acquired individually or jointly. It should then establish what should happen to each of these things when a divorce occurs to avoid them being shared out equally (or even to encourage this to happen).

They are often put in place in order to ring-fence a particular asset and prevent it being shared, and this most commonly occurs if one partner is financially bringing far more into the marriage than the other.

Is a pre-nuptial agreement legally binding?

When news of pre-nuptial agreements first hit the headlines, it was often suggested that they were not legally binding. Whilst in UK law a pre-nuptial agreement is not automatically legally binding, it will be upheld in court as long as it meets certain qualifying criteria. Most importantly, the agreement must have been freely entered into and be fully understood by both parties. It must be fair and contractually valid, and must have been made at least 28 days before the wedding.

For a pre-nuptial agreement to be accepted, it must show that there has been full disclosure about wider financial circumstances, so that both parties know what all of the implications might be, and they must both have received legal advice as part of the agreement. The agreement must also take care not to prejudice any children and should ensure that the needs of both parties must have been met, otherwise it will not be considered to be fair.

Do I need a pre-nuptial agreement?

Not every couple will feel the need for a pre-nuptial agreement, and tend to be used when one partner has significantly greater assets than their other half. This could also be the case if one person expects to receive a significant inheritance in the future, or if they own a business or land. Pre-nuptial agreements are most common amongst those who are marrying later in life, usually after a previous marriage, and have therefore amassed more assets that they then wish to protect.

If you own a business, then you may want to draw up a pre-nuptial agreement to protect this. In this case, it is not only to protect the owner of the business, but also everyone within it who could be inadvertently find themselves caught at the center of a divorce battle.

Pre-nuptial agreements have also proved useful for those marrying someone from another country. Laws in your partners home country may still affect you when it comes to a divorce, so a pre-nuptial agreement can ensure that you both know what to expect and you do not fall foul of laws that you did not know about.

You should think carefully about whether you want a pre-nuptial agreement, and it will depend on your financial circumstances. If you have something that you feel should remain yours throughout and after a marriage, then a pre-nuptial agreement should be considered. However, you should think carefully about how you approach this as it does risk causing offence to the other partner, as they may feel that you are suggesting that you do not trust them or that you do not believe that the relationship will last.

This is why they tend to be more popular amongst older generations who have already seen relationships break down and take a more realistic approach rather than a romantic one.

If you are thinking about putting a pre-nuptial agreement in place, then it is very important that you consult a family solicitor to make sure that it is drawn up correctly, fairly and is legally binding in the event that it needs to be used. If both parties have not received proper legal advice, the pre-nuptial agreement will not be considered to be legally binding by the courts. This is to prevent one party being taken advantage of and to ensure that everyone understand what they are entering into and what the implications are likely to be before they sign it.

Pre-nuptial agreements should not be entered into lightly, but they can prove to be a very important legal document if produced correctly. You may wish to enter into your marriage without one, but for those who feel they need to protect the assets that they bring into the relationship with them, there is a way to avoid the bitter legal battles that ensue when other emotions have been brought into play.