Are prenuptial agreements valid in the UK?
A prenuptial agreement is sometimes entered into by couples who intend to get married. They have been quite common in several countries, particularly in the US, and are normally used to set out the financial matters that would be put in place following a divorce.
Prenuptial agreements have only recently entered UK law, and here we will look at how they work.
What is a prenuptial agreement?
A prenuptial agreement is simply an agreement that a couple enters into regarding what would happen to their financial matters following a divorce.
They are a way of protecting wealth should a marriage go wrong, and are appropriate when one of the marriage partners is bringing to the marriage considerably more assets than the other. They are also a way of protecting future inheritances or the assets of a trust. It is important to remember that prenuptial agreements aren’t only for the rich and famous – they have some very practical uses for everyone.
Is a prenuptial agreement binding in UK law?
In the UK, prenuptial agreements are not always legally binding, but the courts need a good reason to not uphold them. For instance, if for some reason the court considers the agreement to be unfair, and that it does not address the current needs of an individual, it may not be upheld, though the agreement would always be considered in the final decision. The current status of the law is:
“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement”
In other words, if the agreement is considered fair, then the court will uphold it. However if the agreement is in conflict with the needs of the individuals concerned or with those of any children from the marriage, then these needs are likely to be considered more important that the terms of the prenuptial agreement.
Has the law changed?
Yes; following a high profile test case involving a wealthy German heiress and her millionaire French husband, the Supreme Court ruled that prenuptial agreements would have full legal status and that only agreements that were unfair would be overturned.
I am not happy with sharing all of my assets with my spouse should our marriage end.
If you are uncomfortable with the idea of sharing your assets equally with your spouse in the event of divorce, then it is advisable to enter into a prenuptial agreement. If you don’t, all the assets that you bring to the marriage will be susceptible to the court’s discretion.
If the marriage is a long one, then without a prenuptial agreement it is likely that the court would divide all of the assets equally. However it is important that the agreement is properly prepared.
What about civil partnerships?
An equivalent agreement applies to civil partnerships. They are called “pre-civil registration agreements” and they work in exactly the same way as prenuptial agreements.
Do I need a solicitor in order to make a prenuptial agreement?
It is very important for both parties to receive independent legal advice before they enter into a prenuptial agreement. This ensures that they fully understand the terms of the agreement and that the partner who is financially weaker understands what they might be giving up. Both parties will also need to provide full financial disclosures.
There are also other important factors to consider such as the timing of the agreement. It should be signed well in advance of the wedding day, and there must be no duress. There are also implications regarding wills.
As we highlighted above, not all prenuptial agreements are implemented by divorce courts. It is important to ensure that your agreement would be considered by the court to provide a fair financial arrangement, and the best way to do that is to draw it up with the help of a solicitor.
If you thinking about entering into a prenuptial agreement or if you have already decided that you want one then we strongly advise that you speak with one of our local QualitySolicitors who will help you with all of the various options and ensure that the agreement will have the best chance of holding up to the scrutiny of the courts.