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Posted 29 March 2016
People planning to enter a marriage or civil partnership sometimes decide to enter into a Pre-Nuptial Agreement (‘pre-nup’) that states what they intend to happen to their money and property if the marriage or civil partnership were to end.
What does a pre-nup cover?
A pre-nup is a bespoke document drawn up based on the parties’ particular circumstances, so it can cover almost anything that they want it to. There are certain things that couples usually think about when deciding how they would want to work things out if the marriage does not work:
- What would happen to the property that either party brought into the marriage?
- What would happen to the family home?
- What would happen to any property given to either party or inherited during the marriage or any income or assets derived from trusts?
- What would happen to money held in joint accounts and any property purchased jointly?
- What would happen to any saved money earned during the marriage;
- What would happen to the parties’ pensions?
- How would the parties deal with any debts?
- Would either party pay or receive any maintenance and, if so, for how long?
- What kinds of events might require the agreement to be reviewed?
- What kinds of arrangements would the parties like to make for any children that they have or are likely to have, both in financial and in practical terms?
Are pre-nups binding?
A pre-nup cannot usurp the jurisdiction of the court. However, following recent court decisions including the notable case of Radmacher, the court should give effect to a nuptial agreement if it is freely entered into, both parties have received independent legal advice and have made full financial disclosure and have a full appreciation of its implications.
In order to minimise the risk of the court considering any part of the agreement to be unfair both parties will need to set out their financial circumstances in full and take independent legal advice on the agreement and its effects.
We would generally advise that the agreement is entered into at least 21 days before the wedding and ideally 28 days before. This means that if you are contemplating having a pre-nup then you should seek legal advice at least three months before the wedding. This gives your solicitor time to give full advice on your instructions and to organize full financial disclosure prior to the agreement being drafted and signed.
The first step if you are contemplating a pre-nup is to take advice independently from a solicitor specializing in this area. Here at Tozers we are pleased to offer a team of specialist family solicitors who can assist in this area.
Agreements are generally likely to be upheld if they are recent or if circumstances have not changed since the date the agreement was entered into. The longer the passage of time the greater the chance that the court may consider that to uphold the agreement would not in fact be fair on one party or the other, this is particularly true if there have been significant changes to the parties circumstances for example if children have been born since the agreement was entered into.
What provisions can be made for children?
A pre-nup cannot prejudice the interests of any children of the family. It is usual to build in provision for a review of the agreement if and when the parties have children, so that the children’s needs can be considered and assessed at that time, with possible changes made to any expectations of the adults.
In the event of a divorce, if the court is asked to intervene in financial arrangements its first consideration is always the children involved. If the court considers that any agreement of the adults may adversely affect their children it is likely to consider that it is not fair to uphold the agreement in the circumstances. It is not possible to contract out of giving financial support to or for a child.
For those contemplating divorce or any queries regarding pre-nuptial agreements, it is important to seek advice early on the different approaches available so that you can make it as smooth as possible for your family. Contact us at Tozers Family Law Solicitors for all your queries.