If you believe that pre-nuptial agreements are only for rich people or for people who don’t trust their partner, then think again. There are many misconceptions about what they are and their purpose, so it’s understandable that many people shy away from them.
A pre-nuptial agreement is: an agreement that has been made between two people before marrying. They establish the rights to property and support in the event of divorce or death. Pre-nuptial agreements have long been used by couples who want to lay down the terms of any future divorce before they walk down the aisle.
Currently, pre-nuptial agreements are not considered legally-binding, but in more and more cases they are being taken into consideration. A pre-nuptial agreement isn’t just to state what you want to happen in the case of a separation — it’s also to set out how you see your finances and to create a financial ‘plan’ in which you can express what you would like to achieve.
A pre-nuptial agreement could be prudent if:
Are pre-nuptial agreements legally binding?
Not in the UK, but as long as they have been drawn up correctly and the couple has been consulted separately about pre-nuptials, they are taken into consideration if a couple files for divorce.
How long before the wedding does the pre-nuptial agreement have to be signed?
Ideally, 30 days. This is to give both parties the opportunity to think about what it is they are signing and to back out or change the agreement if they wish. It also shows that you no-one was pressured into signing just before the wedding. Technically, anything that was signed less than 30 days before the wedding would be considered invalid.
Can we use the same person for advice?
Each party should get advice from a different person in order that unbiased advice can be given to protect the interests of each party.
When would be a good time to bring up the idea of a pre-nuptial agreement?
As soon as possible, to give yourself plenty of time to find out what can and cannot be achieved by a pre-nuptial agreement and to get the documents drafted.
How often should we review our pre-nuptial agreement?
We would generally advise that you review your pre-nuptial agreements every 10 years. Although after you are married and you choose to review your pre-nuptial agreements, you will now need to get what is known as a nuptial agreement. This agreement is between married couples and is a different process.
When would courts disregard the pre-nuptial agreement?
UK courts don’t see the document as legally binding so there is no guarantee it won’t be dismissed, but they will take the agreement into consideration if they believe that the agreement is fair and that both parties understood what they were agreeing to when they signed it.
Will the birth of children affect our agreement?
Yes – that is why we advise that you review your agreement after big events such as the birth of children or the receipt of an inheritance.
What are the consequences of not putting a pre-nuptial agreement in place?
Because you haven’t set out details of the assets you brought to the marriage, you could find yourself in for a very long, expensive and complex divorce. People’s emotions usually run high when they are going through a divorce, but a pre-nuptial agreement shows the courts you have discussed your future and made plans for this potential eventuality when you were on more amicable terms.
I’m worried if I don’t sign the pre-nuptial agreement the wedding will be called off
If you don’t feel you’re getting a fair deal, stand your ground. If things don’t go right in the relationship and you end up getting a divorce you could lose out. For total peace of mind, make sure you express all your concerns before signing any documents.
How long will it take for my agreement to come into effect?
It will come into effect from the moment it’s signed, ready for the wedding, but remember that at least 30 days should pass.
LR Connections provides expert independent financial advice, accountancy and estate planning services
