That is a question you may be asking yourself in advance of your upcoming marriage. Perhaps there’s a voice in the back of your head telling you that this is unromantic and you should get back to more exciting wedmin, like flowers and venues and guest lists, oh my!
But one of the few certainties in life is that life is uncertain. And much like life, so can the court process be uncertain. No solicitor will ever be able to guarantee the outcome that may be reached in court proceedings. A pre-nuptial agreement is one opportunity to put a little more certainty into your life. Here, we explain how and give some more details as to the nature of pre-nups and the process involved to enter into one.
A pre-nuptial agreement is an agreement entered into in advance of a marriage that outlines the financial position of each party prior to the marriage and sets out how finances should be divided in the event that the marriage breaks down. It further allows the couple to stipulate how finances should be treated during the marriage and can give more control to the couple over the divorce process, should the need arise.
To enter into an effective pre-nup, you should:
- Seek independent legal advice
Agreements should be drafted by solicitors and each party must seek independent legal advice. This means that you cannot see the same solicitor and should each be advised separately as to the contents of the agreement, its effect and whether the agreement as drafted reflects what you were intending it to do.
- Communicate openly & be aware of any disparities
Parties must exchange full financial disclosure prior to entering the agreement. Being honest with one another upfront will aid the process and enable you to unearth any points of contention that need to be negotiated.
It can happen that parties do not agree on the terms and these need to be negotiated through their solicitors. Where this is required, it can take some time to finalise the agreement. It is therefore important to contemplate this possibility and allow enough time to negotiate and finalise the agreement.
- Be aware of legal enforceability
Pre-nuptial agreements are not legally binding in the UK. However, following the decision in the landmark case on nuptial agreements, Radmacher v Granatino, the court should give effect to a pre-nuptial agreement entered into freely where each party appreciated the implications and it would be fair to hold them to the agreement.
- Be thorough
This can strengthen a court’s willingness to give effect to a pre-nuptial agreement. Think about any assets in other jurisdictions which must be considered or any future relocation to another jurisdiction as the laws governing pre-nuptial agreements may differ in other legal jurisdictions. While the financial need of any future children is a separate legal matter, contemplating future financial needs for children will also aid in this respect.
- Prepare in advance
The courts will be more likely to enforce an agreement entered into in advance of the marriage. This is because it shows indication that the agreement was not rushed into and that neither party was pressured to sign the agreement. We recommend completing the agreement 2-3 months ahead of your marriage and in any case the agreement must be completed 28 days before the wedding.
Pre-nuptial agreements can be complicated documents particularly where varied asset types and multiple jurisdictions are involved so be aware that this can take some time to draft well and to agree with your future spouse.
Tensions can run very high during divorce. Family breakdown is difficult to deal with emotionally, personally, financially and can be particularly challenging for any children involved. Making arrangements in advance of this potential eventuality could make a difficult process less so; it can assist you in retaining more control over the outcome rather than leaving important decisions about your financial future up to a judge – who is a third party to your relationship; and it can provide peace of mind knowing that you have considered how to protect your position, your future and the interests of any children you may have.