Prenuptials - An Agreement Not Just for the Rich and Famous

What is a Prenuptial Agreement?
It's an agreement in which a couple sets out their rights in relation to any property, debts, income and other assets purchased together or that they have bought into a relationship. A prenuptial agreement allows the parties to protect their separate property and other assets.

The reason for this is that once married all assets become matrimonial assets and unless otherwise protected are thrown into a single financial pot.

Such an agreement also allows each party to protect themselves from the others' debts, those incurred before the marriage. With the vast amount of personal debt that many individuals have for some people this can be even more important than protecting the family home.

A prenuptial agreement can address situations in which one partner leaves a secure job to go and live with their partner in say another part of country or indeed the world. If the marriage then breaks down, a prenuptial agreement can take account of such loses to the party who made the move for their partner.
The primary purpose of a prenuptial agreement will frequently be to limit the potential claims on the wealth of one of the parties to the marriage. This is normally the case when one party brings considerable wealth to the relationship or perhaps one or more of the parties have been married before and have family who might potentially benefit from a step parents' wealth.

Such agreements are flexible and can be written to take account of changes in circumstances, in particular the birth of a child, and longevity of the relationship. The parties may of course only have intended the agreement to act as a safeguard in the event of a short marriage.

How do prenuptial agreements work?
It used to be the case that agreements made before marriage that attempted to influence the way in which the divorce courts allocated assets were of little value. However recent case law indicates that England is catching up with the rest of Europe where prenuptial agreements have been recognised for years.

The validity of prenuptial agreements in the UK was strengthened earlier in 2004 when the English Courts upheld a prenuptial agreement and a wife lost a substantial claim.

The Courts now take prenuptial agreements seriously but they will carefully consider things like:

1) Did the party with the most to lose understand the nature of the agreement?
2) Did he/she have independent legal advice?
3) Was he/she under pressure to sign?
4) Was there full financial disclosure?
5) Would an injustice be done if the agreement were upheld?

Why use a prenuptial agreement?
A significant percentage of marriages now end in divorce. It is understandable that mature adults, and in particular those who have been married before, might wish to agree what should happen in the event of a breakdown of the relationship. Prenuptial agreements can provide certainty and the means of protecting pre-marriage assets, inheritance, and existing family commitments such as children from a previous marriage.

How to get a prenuptial agreement
Prenuptial agreements are of course not without their problems, they must be carefully drafted, and financial disclosure must be obtained before negotiations take place. Independent legal advice must be sought by both parties in order to protect the other party against the allegation of undue pressure to sign an agreement. Such important matters as these are taken into account by the courts so it's important to get it right up front. Prenuptial agreements cannot take away the discretionary powers of the court in deciding what is fair, but a well drafted agreement will be of significant value in any decision made by the courts as it clearly shows the intention of the parties involved.

And it's clear that you don't have to be rich to benefit from a carefully constructed prenuptial agreement. With the current value of property, and the extremely high divorce rate, it makes no sense NOT to consider whether a prenuptial agreement is in your interests.

Woolley & Co draft prenuptial agreements, often for a fixed fee of £595 plus VAT. For more information telephone Dianna Gerald of Woolley & Co Solicitors on 01905 360627 or 01452 899 048 or email her at dianna.gerald@divorce-lawfirm.co.uk.