Five Tips for a 'Successful' Prenup
The concept of what makes a successful prenuptial agreement is a complex one. As the law currently stands in England and Wales, 'prenups' are not automatically legally binding. However, there are a number of factors that a Family Court will consider when exercising its discretion as to whether to accept a prenuptial agreement during a divorce financial settlement.
So, in order to create a successful prenup, it is advisable to take these into account as you approach your prenup negotiations.
In this guide we will talk about 'pre' nuptial agreements, but similar contracts can be negotiated if the marriage has already taken place (known as postnuptial agreements) and by civil partners (known as a pre-registration agreements).
Here are our top tips for creating your prenuptial agreement:
Know your own wealth
The most common reason why couples wish to create a prenup is when there is a significant disparity of wealth; this could be current wealth, such as savings, investments and other assets built up before marriage, or wealth you are likely to inherit.
A well-drafted prenuptial agreement may be able to protect certain elements of your wealth should you later divorce, especially if it would be unfair to lose part of those assets in a 50/50 division. (Equality is the position the court will start from in relation to division of all marital property unless the parties to the divorce can demonstrate their entitlement to deviate from this model).
If you are expecting future wealth as part of earnings from work you have initiated prior to marriage, you may wish to include this in your prenup; for example 'special interest' in certain private equity funds and intellectual property rights.
Also, if you wish to preserve certain property and assets for future beneficiaries, it may be wise to include these in a prenup, so they do not become considered marital property over the course of a long marriage.
Know your partner's financial position
It is wholly advantageous to provide full and frank financial disclosure of your assets and liabilities when negotiating a prenup; to do so also gives each party the chance for transparency and this can be a very positive way to start your married life..
Know what can be included
The following are the most common issues to consider when negotiating a prenup:
- The family home: including how it might be handled in the event of divorce.
- Property: outlining any specific possessions that should be 'ring-fenced' because they were inherited or owned prior the marriage.
- Money: including liquid assets such as savings and illiquid wealth such as investments, bonds and pensions.
- Children: in relation to children from previous relationships and their rights to your wealth in the event of a divorce.
- Inheritance and trusts: particularly in relation to assets and wealth that will be inherited by others in the future.
- Debts: see the section above on 'Knowing your partner's financial position'.
Know that a prenup can be varied
A prenup is a contract and will either be in place for a time determined within the agreement or for the life of the marriage. You may wish to include a date or dates for review and when the prenup will end.
As we have already mentioned, in the UK prenuptial agreements are not automatically legally binding or enforceable. If you have already signed a prenup but are now concerned about the contents, you may be able to review the document. Speak to a specialist Family Law solicitor about your concerns.
Seek legal advice on prenuptial agreements
In order to enhance the possibility of the court accepting a prenuptial agreement , it will be necessary to draft the document very carefully, taking account of current statute and relevant caselaw. Your Family Law solicitor will guide you during the negotiations and the drafting process, to make sure the agreement is fair and lawful, and that you understand the implications of signing the Agreement.
The court will wish to see that the prenup was entered into freely, in a timely manner and without pressure or coercion, so if you wish to have a prenup in place prior to your wedding day, it is a good idea to start the process as early as possible.
A solicitor experienced in drafting prenuptial agreements will help you to ascertain and disclose your wealth, and give you guidance on how the Agreement could protect you in the event of future relationship breakdown and divorce. They will also be able to ensure that the document is drafted, signed and witnessed correctly.
Expert solicitor for prenuptial agreements in London
Goodsells Family Law has many years' experience assisting couples with the legal aspects of their relationships. We will listen to you carefully and provide clear advice on the appropriate options for your situation.
Contact Donna Goodsell on 020 7622 2221 or complete our online enquiry form.