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Sadly around 50% of marriages and civil partnerships now end in divorce.
What is a Pre-Nuptial Agreement?
A pre-nuptial agreement is a document which sets out what you and your future spouse or civil partner agree should happen in relation to your finances if your relationship breaks down and you separate.
Pre-Nuptial Agreements can provide a means of protecting pre-marriage assets, inheritance, and existing family commitments such as children from a previous marriage. Legally, once married or in a civil partnership most of these assets will become matrimonial assets and, unless specifically protected, are thrown into a single financial pot.Anyone contemplating marriage/civil partnership should consider whether they need to protect their finances. Pre-Nuptial Agreements are particularly popular amongst the wealthy who seek to protect their existing wealth and amongst those who already have children and wish to protect their future inheritance.
Are Pre-Nuptial Agreements binding?
You should know at the outset that although they are now much more common, pre-nuptial agreements are not yet strictly legally binding. However, the courts do take them into consideration, providing that there have been no significant events such as the birth of children of the family or serious illness, and they meet the following criteria:
- Each of you has had independent legal advice
- Both of you have made full and frank disclosure of your financial position to each other
- There has been no pressure on either of you to enter into the pre-nuptial agreement. Therefore generally you need to enter into the agreement at least 21 days before your marriage or civil partnership
In the event of your subsequent divorce, the court must consider all the circumstances of the case and decide on what is a fair outcome. So although it is up to the court’s discretion to take the agreement into account, our experience shows that pre-nuptial agreements are becoming much more relevant to the decisions made. At very least a Pre-Nuptial Agreement acts as a starting point, particularly if the circumstances haven’t changed dramatically, or if the marriage/civil partnership is short. A Pre-Nuptial Agreement is therefore far preferable to having no agreement at all.