A pre-nuptial agreement is where both parties to marriage or civil partnership decide on how their assets should be split before the ceremony even takes place. While at the start there was a natural aversion to this and the feeling that they were setting themselves up for failure, as many couples tie the knot in later life, such agreements are becoming increasingly common.
Pre-nups are useful where both parties both have assets of some description they want to protect. This usually refers to property or stocks and shares, and less so to individual items such as a high-end PC.
The starting position in law is that matrimonial assets are split 50:50, and so a pre-nup can be used to strengthen the argument that a particular asset is a ‘pre-matrimonial asset’ and therefore should be excluded. This is not inherently unfair. For example, imagine each partner in a couple already own a property in their respective sole names. They decide to make one of those their matrimonial home and rent the other. Under current law, there is a strong argument that the matrimonial home became a joint asset through conduct (and therefore can be split 50:50) whereas the rented property was a pre-matrimonial asset and was kept separate from marriage finances (depending on how the rent money was used). This would seem unfair for the owner of the matrimonial home, as they are left with half a property, whereas their former spouse has one and a half.
A pre-nup could set out the rules of how the properties would be split: whether both would be sold and proceeds divided, whether each would simply keep what they took into the marriage, or any other such arrangement as the couple deems fit.
Pre-nups can also be used in anticipation of a large inheritance, to either allow for it to be included or excluded from the matrimonial pot.
Provided both sides agree and have received independent legal advice, there is a strong inclination of the courts to uphold consensual agreements between adults. However, pre-nups are not legally binding nor enforceable, and couples should take care to avoid common pitfalls and risk having it set aside.
Pre-nups should only be made once both sides give full and frank disclosure of their assets, to avoid any allegation that the agreement is void. It should also not peer too far into the future: agreements involving childcare and child expenses may not deemed to be too speculative if the couple do not already have children.
It is also worth bearing in mind that a pre-nup made before a long marriage over several years (or even decades) may be less impactful than one made before a short marriage. The position of the parties may have changed dramatically in the interim period and the court may hold it unfair for a fifty-year old couple to be held to a financial agreement made in their twenties.
For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email email@example.com or visit our Linkedin page.