Getting married? Why you should get a Pre-Nuptial Agreement
Some may think that considering a pre-nuptial agreement is perhaps a little pessimistic at what is meant to be one of the happiest times of your life, planning a wedding. However, it is clear that some forward thinking can often be beneficial and can make things easier if each person has set out their intentions and wishes from the start in relation to their pre marital assets. Examples could include (but are not limited to)
- An inheritance
- A business, either established or start up business
- Property owned before the marriage
Protect your business
The Supreme Court authorises the use of a pre-nuptial agreement to shield family wealth and assets acquired before the marriage. In relation to a business for example, it can be useful to set out a person’s wish for the business to be excluded. This can also be the case where there are two or more partners within the business and the other partner (not the individual getting married) may wish to ensure that their business is protected from any claim from their business partner’s spouse. We are seeing more and more frequently the practice of all business partners ensuring they obtain a pre nuptial agreement in an attempt to limit each of their spouses’ potential claim in relation to the business, which may ultimately result in the unintended consequence of the spouse having a claim to the business.
In relation to an inheritance or property owned, it may be that perhaps property is jointly owned with siblings, or that there is a wish for the property to go to a child or children who are not the children of both of the parties. With families becoming less ‘traditional’ these considerations are becoming increasingly relevant. The reason for the agreement could however simply be that the spouse wishes for the assets accrued before the marriage remain their own.
What is a Prenup
A Prenuptial agreement is a document reflecting the intentions of the parties in the event of the breakdown of the marriage. Whilst the agreement is not legally binding, if the agreement passes the three stage test set out by the Supreme Court, you should expect to be held to its terms.
The law in relation to prenuptial agreements is complicated but to summarise, the requirements for the agreement to carry weight with the court are as follows:
- It must be contractually valid. There must be no factors present that cast doubt on the free will of the parties to the agreement or on the level of information a party had when entering the contract. Any evidence of mistake, misrepresentation, duress or undue influence may cause the agreement to fail
- It must be validly executed as a deed and contain a “relevant statement” signed by both parties
- It should not have been made within the 28 days leading up to the wedding
- Exchange and disclosure of both parties financial circumstances must have taken place
- Both parties’ needs must be met, wherever possible
Its not too late … You can make the agreement after marriage
Postnuptial agreements can be made after the marriage has already taken place. The purpose of a post-nuptial agreement is essentially the same as the pre-nuptial agreement. The agreement could focus on non-matrimonial property owned by one party before the marriage, or assets a party receives from a third party during the marriage, through lifetime gift or inheritance.
A ‘Postnup’ is also available to protect your business.
If you are concerned about how any of this may affect you, we offer a free initial consultation so please call us on 01274 861096 or email ENQUIRIES@barnesfamilylaw.co.uk.