Are Prenuptial Agreements just for the super-rich?

In this Insights article, our Family Law team explore the prenuptial agreement, or ‘prenup’ as they are often known – what they are and whether the common preconception of them being for high-flyers and celebrities is a misconception.

What is a prenuptial agreement?

A prenuptial agreement (often called a ‘Prenup’) is an agreement made by a couple before they marry or enter into a civil partnership, which sets out how they wish their assets to be divided if they should divorce or have their civil partnership dissolved.

It is also possible to enter into a ‘Postnup’, which has the same effect but is prepared after the marriage has taken place.  In this article, we will only refer to ‘Prenups’ but actually this information applies to both.

Are they just for the super-rich?

Prenups have often been associated with just the very wealthy or super-rich but now that is no longer the case.  Cultural shifts which have happened over the last 50 years have meant many people are now choosing to marry later in life and have acquired wealth through property and investments.

It is also more common for people to re-marry after becoming a widow/er, or marry after a previous relationship breakdown, and there are often children from these previous relationships for whom you wish to protect certain assets.

You may have a business, property, investments, inheritance, trusts, or family heirlooms you wish to keep in your family and the concept of a Prenup is to try to provide certainty as to what should happen to these should your marriage/partnership dissolve.

It can also deal with debts you or your spouse may have from which that you can protect the other.

It may feel unromantic to consider a Prenup, but entering into a marriage/partnership is a big decision and has legal consequences.  It is therefore prudent to consider these issues and the potential benefits of entering into a Prenup for maximum protection.

Are they legally binding?

The court makes a presumption that where an agreement is entered into freely, with a full understanding of its implications, it should be followed in the event of a divorce.

However, a Prenup does not bind the court completely, as there is clear guidance that a Prenup will not be effective if it is not considered to be fair to both parties.  Where a Prenup does not allow for both parties to be securely housed for example, certainly after a longer marriage, it is likely that a Prenup will not be followed by the court.

For this reason, while they certainly improve chances of keeping family assets with the person who brought them into the marriage, Prenups are generally more likely to be followed in matters where the value of the assets is relatively high or where the agreement provides for a reasonably equal division, unless the marriage has been short.  This is a relatively complex issue, and it is important to get expert legal advice.

When should we sign?

A Prenup needs to be signed at least 28 days before a marriage takes place.  Each of you will need to obtain separate, independent legal advice (to evidence that both of you have entered into the agreement freely and willingly), and you will both need to disclose all of your assets fully.

It is therefore advisable to start the process a few months before you get married to have pressure free time to agree everything and for your solicitor to draft the document.

Our expert Family Law team can help negotiate, draft and advise you on suitable terms for both pre-nuptial and post-nuptial agreements. For more information and to discuss your own circumstances, please contact us on 01603 620508 or complete our online enquiry form below.