A pre-nuptial agreement, otherwise known as a prenup is becoming an ever increasingly common document between couples these days. With many second or third marriages, where each party has established income and assets, the desire to protect these, should the marriage end in divorce, is a strong one.
In many cases, where one or both parties have children from a previous marriage or relationship, the prenup is used as a way of ensuring past assets pass to the children in the event of a divorce. So why are prenups so popular and why should you consider one before marrying?
What is a prenup agreement?
A prenup (prenuptial agreement), is a legal document, drawn up by a qualified solicitor and signed by a couple prior to getting married. A prenup sets out how any assets or money should be divided if the marriage or civil partnership comes to an end.
Why is a prenup important?
The prenup document sets out to determine what will happen to individual or joint assets and money in the event of a divorce. It may be the case that one party has considerably more financial wealth than the other before marriage, or that one or other party wants to ensure their assets are protected for their children from a previous relationship or marriage. Protecting a large future inheritance may also be another reason for wanting a prenup.
A prenup can also help minimise any disagreements over finances during divorce because the couple has already set out their wishes.
A Law Commission
report states that ‘qualifying nuptial agreements would give couples autonomy and control, and make the financial outcome of separation more predictable
5 need to knows when considering a prenup
A prenup is not legally binding in England and Wales but may be upheld in court as long as it meets certain criteria:
- The agreement is made at least 28 days before your marriage
- You have both received independent legal advice
- The agreement is entered into freely by each of you
- The agreement will not prejudice children from the relationship
- You have each provided full disclosure of your finances
- The financial outcome is fair taking into account all the circumstances
Benefits of a prenup
Drawing up a prenup will help provide you both with clarity and transparency over each other’s financial situation as well as:
- providing you with the opportunity to discuss and agree on how you would like your finances to be distributed should the marriage or civil partnership come to an end
- Potentially save you time and legal costs
- help to ring-fence any future inheritance
- help to provide for children from a previous marriage or relationship
Even though prenups are not legally binding, courts will consider them in a divorce case as long as the above criteria have been followed. Some may say that getting a prenup takes the romance out of getting married whilst others will maintain that being able to be completely transparent with your partner and having open communication around finances and the future is a huge positive in a loving relationship, and after all, a prenup will only come out of the drawer if the marriage has ended.