1) What is it?
A prenuptial agreement AKA a premarital agreement or an antenuptial agreement, can commonly be abbreviated to prenup or prenupt.
It is ultimately a formal, written contract between parties prior to their marriage or civil union.
2) Are they legally binding?
As a result of the UK Supreme Court ruling in Radmacher v. Granatino (2010), prenuptial agreements are now given heavy evidential weight within the UK Family Courts, unless considered to be unfair.
That being said, while British courts recognise these agreements, they also still have the discretion to waive them.
Particularly if deemed to be unfair to any children of the marriage.
3) Why get one?
Tom Cruise and Katie Holmes had one.
So did Brad Pitt and Angelina Jolie.
Kim Kardashian and Kris Humphries did, too.
These three now-divorced couples all had prenups, but they are not just for the wealthy.
A prenup will preserve the expectations of the parties and prevent surprises in divorce proceedings. They assist by providing clarity to parties when an emotive topic such as ‘money’ enters into a relationship, especially when parties have a different attitude towards money.
A prenup can help to provide that peace of mind, particularly, if there are assets and/or property that would be difficult to split equally and if you, and/or your partner, have children from a previous relationship and want to ensure certain assets are preserved for them and protect their inheritance rights. (A Will is also essential in order to preserve and protect in this instance.)
A prenup can also assist where you want to protect inherited money, assets, savings, and future inheritance or retain control of a business or avoid outstanding debt.
4) What should be included?
Every prenup is bespoke to particular circumstances; usually a prenup will include provisions for division of property and spousal support in the event of divorce or breakup of marriage. It can set out the ownership of belongings, for example, money, property and assets. Prenups can contain a vast array of terms and conditions, for instance, terms for forfeiture of assets where a divorce ensues as a result of adultery.
The most basic of prenups lists an inventory of premarital assets that in the event of a divorce will remain the property of their original owner.
5) What happens if I do not have one?
Without a prenup, the starting point for the division of property and assets will generally be equality of assets between both parties.
The Court will look at the role of “economic provider” and “child carer/homemaker” as of equal value to the welfare of the family.
While this is generally the fairest distribution of a couple’s assets, in certain circumstances it can be considered unjust.
- PRENUP CHECKLIST
Must be drawn up by a qualified solicitor
Parties must have independent legal advice to avoid any conflict of interest
Parties must fully understand and voluntarily agree to it
Solicitors must confirm it was entered into freely/knowingly
Signed at least 21 days before marriage
Assets/property must be fully disclosed
Rebecca says that she feels ‘trapped’ in her marriage.
She is not happy anymore, but a few years ago she inherited a substantial sum of money from her grandparents in their Wills.
This is an eventuality that she was not aware of before her marriage, but that most solicitors when drafting prenuptial agreements take into consideration as a possibility.
As Rebecca did not stipulate in any prenuptial agreement what would happen in the event that she did inherit monies, this monies now forms part of the ‘marriage pot’ and will be divvied up between the parties accordingly.
It is one of the reasons that she is determined to keep trying despite her unhappiness.
Unfortunately, this is a scenario that occurs quite frequently and although a prenuptial agreement can sometimes have negative connotations, in this day and age it important to prudent. It does not mean that you love your husband or wife to be any less, it simply means that should the worst happen, both parties have a contingency plan.
If you would like to speak to us about the preparation of a prenup, please call us on 01279 466 910 to book in for your free 20 minute consultation.