A Guide to Prenuptial Agreements
7th February, 2022
If you are planning on getting married soon, we would recommend considering the option of a pre-nuptial agreement, or 'pre-nup' as they are more commonly known.
What are prenuptial agreements?
A ‘pre-nup’ is a formal contract in which you set out your intentions as to how your finances should be divided in the event you separate from your spouse. Although not legally binding in England and Wales these documents are becoming more popular as the Courts are placing greater weight and reliance on them. At a glance these can be seen as unromantic but when you are married and in love, a person is often more willing to provide for the other person than during a separation. The one true benefit of a ‘pre-nup’ is that it avoids contested and expensive divorces.
What are the benefits of having a prenuptial agreement?
We appreciate that thinking of separation before you are even married can feel pessimistic. However, we prefer to think of ‘pre-nups’ as a realistic solution to what could be a very costly and painful event if you do separate. Prenuptial agreements can provide a level of certainty, reduce lengthy legal disputes during a divorce and the costs associated with these lengthy legal battles.
Prenuptial agreements are effectively a planning tool which can help to ensure more financial security in the event parties separate and divorce.
‘Pre-nups’ are especially useful for a person who has generated or inherited a significant amount of wealth before the marriage, as it can provide some protection for the individual if they divorce. Similarly, ‘pre-nups’ can be beneficial for someone who has a high earning capacity, such as an athlete, as it can be used as a way of limiting any maintenance provision that may need to be paid to your spouse, and can be used to protect assets accumulated during their career.
However, it is important to note that you do not need to have significant wealth or assets to benefit from a pre-nup. Divorces can be unpredictable and volatile but having an agreement can help to mitigate these potential issues from arising during a divorce settlement.
What does a prenuptial agreement contain?
Every prenuptial agreement is different, as they are tailored to fit the individual circumstances of each client.
A prenuptial agreement can also be used to set out how assets are to be held and managed through the duration of the marriage, such as whether the married couple will open a joint account or how their property is going to be held.
There is also the option to use a review clause as part of your ‘pre-nup’, which allows you to review the agreement after a period of time has elapsed, or in light of a significant event such as a birth of a child. This is an option that certain professionals may benefit from, such as footballers whose income tends to decline towards the end of their career.
What is the cost of a prenuptial agreement?
As previously discussed, no prenuptial agreement is the same, and as a result the price of a ’pre-nup’ can vary significantly. The cost of a prenuptial agreement is dependent on the complexity of the financial arrangements and the length of the negotiations involved.
How to get a prenuptial agreement?
If you are wanting to find out more information about prenuptial agreements, or you are looking to proceed with one, then contact one of Ward Hadaway’s specialists here.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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