What Is Pre-nuptial Agreements?

A pre-nuptial agreement (“Pre-nup”) is a legal agreement made between two parties before they get married. Usually, the agreement specifies how the couple wish to split their assets in the event of separation or divorce.

You can also use a Pre-nup if you are planning to enter into civil partnership – although they are often referred to as pre-registration agreements.

Should you get a Pre-nup?

It is very common to think that a Pre-nup is just for wealthy people, such as business people or celebrities who wish to protect their assets. Such an agreement can make sense when one half of the couple has significantly more assets than the other, he/she stands to lose more than the other in an equal split divorce settlement.

However, in the case where neither of the couple have significant fortunes before getting married, they could still wish for a Pre-nup if either / both of them is / are expecting significant further earnings.

Furthermore, should you anticipate receiving gifts of large value (for example, a property gifted by your parents) or there is an inheritance to protect before the marriage, it may be a good idea to consider making a Pre-nup.

Is Pre-nup binding in the UK?

Short answer, no.

Pre-nup is not legally binding, which means that in an application for financial remedy, the court would have absolute discretion ( based on needs and contribution to the marriage ) to decide how to distribute the parties’ assets regardless of the contents of the Pre-nup.

However, if the agreement has been properly drafted, the court will give appropriate weight to it and the parties intentions when assessing an application for financial remedy. If a Pre-nup is drafted properly and no details of assets are left out by either party, it is often the case the court will accept all the terms of the Pre-nup that the party agreed to. To be more precise, the court is more likely to uphold a Pre-nup that is freely entered into by both parties with a full appreciation of its implications and all assets and monies are listed fairly.

Pros of a Pre-nup

It is quite self-explanatory that one of the biggest pros of getting a Prenup is to protect your assets that you have now or will have in the future.

Furthermore, in the case that your partner has significant debts (or likely to incur significant debt in the future), a Pre-nup could be used to protect your assets from being used to satisfy those debts.

It would incur some legal fees for solicitors to draft and advise on a Pre-nup. However, in an unfortunate and unpleasant divorce, a Pre-nup could save you significant stress and further expense, if both parties adhere to the terms of the prenup, during separation and divorce.

In addition, it could be you have concerns that your partner may be marrying you due to your wealth. If your partner agrees to enter into a Prenup with you that leaves you both with fair and reasonable financial terms, this may actually it ease your mind and strengthen the bonds of trust as you enter marriage.

Cons of a Pre-nup

As mentioned above, it is not legally binding, but persuasive to a court.

Also, trying to negotiate the terms of a Pre-nup may be awkward with your partner. It may be something they are unwilling to discuss or enter. It is always best to be open about the reasons for suggesting same. This may still cause a barrier between you.

Additionally, it could be the case that it is the parents of the economically stronger party pushing the couple into making a Pre-nup. A Pre-nup can end up reflecting the parents’ wishes rather than the couple’s wishes. In this regard, the behaviour that amounts to duress and undue influence may result in little (or no) weight being placed on the Pre-nup in any future financial remedy proceedings. To safe guard against this risk, usually both parties should have separate lawyers representing them.

The future of Pre-nup

On 27 February 2014, the Law Commission published a report recommending the introduction of qualifying nuptial agreements that will limit the court’s powers to make financial orders on divorce or dissolution. The court would be prevented from making orders inconsistent with the terms of a qualifying nuptial agreement unless in exceptional circumstance.

To be a qualifying nuptial agreement, an agreement must meet the following criteria:

• It must be contractually valid;
• It must be validly executed as a deed and contain a “relevant statement”;
• It must not have been made within the 28 days immediately before the wedding or civil partnership ceremony;
• Both parties to the agreement must have received disclosure of material information about the other party’s situation when they entered into the agreement; and
• Both parties must have received legal advice at the time they entered into the agreement.

This is a recommendation to the judiciary, but the intention is clear that unless the Pre-nup is unreasonable and unfair to one of the parties that entered it, the court should be persuaded that these terms agreed to are sanctioned.

Please contact our experienced family law team if you have any questions about pre-nuptial agreements or matrimonial-related enquiries. Our team speak several languages beside English including Mandarin Chinese, Cantonese, Portuguese, Russian, Gujarati and Korean.