Gibson Kerr says that although most couples don’t want to think about the negatives when they’re planning their big day, they should consider the extra security that a pre-nup will make in the event of a future marital emergency. The firm highlights statistics showing that one in three marriages in the UK ends in divorce – and says that the stats show that making a prenuptial agreement is a prudent, rather than depressing, option for people planning to get married.
Fiona Rasmusen, Partner and family lawyer at Gibson Kerr, said: “Pre-nuptial agreements are viewed with a lot of caution and scepticism by many couples, as they’re seen as an admission that you think something is going to go wrong with your marriage. Most people who are about to get married just don’t want to think that anything bad will happen in the future. “However, the stats show that one in three marriages is likely to end in divorce, so it’s a sensible step to consider a pre-nuptial agreement. You may think that you’re admitting defeat but, in reality, you’ll actually be making a wise financial move to safeguard yourself if the worst happens.” The firm has drawn up a short how-to guide to prenuptial agreements in order to show how they work and which people should be considering making them.
What will a pre-nup do for me?
A pre-nup is designed to predict the outcome of any divorce settlement before the marriage takes place – and will help prevent any speculative claims in the event of a short marriage.Pre-nups also help to protect the needs of children from previous marriages and to protect any property intended to be bestowed on your children.
Finding out if a pre-nup is the right choice
If you have any assets acquired before your marriage, have children from prior marriages or if you expect to acquire any money or property by way of gifts or inheritance during your marriage, then a pre-nup could help preserve your assets if you end up divorcing. Alternatively, if you already own a business or property – or if you are expecting any other kind of financial windfall – you could benefit from a prenuptial agreement. It used to be perceived that only fabulously wealthy people or control freaks made a pre-nup, so remember that these agreements are now becoming more socially acceptable – and important – methods of enabling people to be prepared for the future. Pre-nups can be appropriate in situations where one party is significantly wealthier than the other or has particular assets which they want to ‘ring-fence’ in the event of a breakdown in the relationship.
Talk to your partner
No one likes to think about the worst-case scenario when they’re planning their wedding and broaching the subject with your partner can be the hardest part in the whole process of making a pre-nup. However, by sitting down and discussing how the agreement will help protect both your assets, as well as avoid uncertainty in the future, you will be able to highlight the benefits rather than the negatives. Remember that the earlier you discuss the subject, the better – and bear in mind that both parties have to be given the opportunity to take proper and full legal advice before signing. If you think a pre-nup is right for you, it is very important to make arrangements early so that things are not left to the last minute just before the wedding. A spouse who is asked to sign a pre-nup at the last minute may be able to argue later that it was unfair due to the pressure of the situation.
Inherited assets
An important thing to consider when entering into prenuptial agreements is how to preserve inherited family wealth. You may have family assets that have been passed down for generations and you want them to stay in the family rather than being sold in the event of a divorce in order to satisfy a court-imposed financial settlement. A pre-nup will enable you to ring-fence these assets from any divorce settlement, in order for them to be inherited by your family in the future.
Children
If you have dependent relatives or children from a previous marriage, you may well want to ensure that their interests are not jeopardised by a future divorce. Stating your financial intentions in a prenuptial agreement will give some protection for your children and dependants – as it ensures that the interests of your ex-spouse on divorce do not take precedence over the financial security of your children.
Expert advice
Always consult a legal expert before you take the final step to make a pre-nup. A good family law firm will give you impartial advice on whether a prenuptial agreement is right for you and, if so, what the best way is to set one up. A law firm will also ensure you disclose all assets to your future spouse – a vital step, as the failure to disclose assets properly, will result in the defeat of a prenuptial agreement at a future date if it is challenged.
Don’t DIY
There are many websites offering knock-down rates for “DIY” pre-nups and it’s tempting to try and save money by trying to fill in the paperwork yourself – particularly if you have the expense of a wedding to think about. However, you shouldn’t fall for the cheap option when securing your future. Always get legal advice from an expert, who will be able to show you the correct way of drafting a prenuptial agreement.
Post Nups
Over the course of a long marriage, the circumstances of the parties can change a great deal – for instance, the parties are likely to have children – and therefore it might become necessary to vary the original pre-nup by entering into a post-nuptial agreement.
How legally binding are they?
It is important to understand that, although the courts in Scotland start from a standpoint of enforcing an agreement made between two adults, there are circumstances where a pre nup could be successfully challenged, for instance, if one person can argue that the agreement was not fair and reasonable when it was entered into. Although pre nups are generally very persuasive they are not necessarily watertight.
Other countries
Until recently English courts have not been prepared to recognise pre-nups but this attitude is now changing. In recent cases, English courts have upheld the terms of prenuptial agreements on a number of occasions and there is now an indication that this will be the trend in the future.
Cohabitation
This type of agreement is not restricted to those about to marry. It is becoming common to enter into such an agreement in advance of cohabiting, especially where a property is to be bought by the couple. If one person puts more money into the purchase than the other, then it is important to decide what is to happen in the event that the relationship breaks down and the property is sold. Does that person get his/her money back? If so, this has to be reflected in a written agreement otherwise the proceeds will be divided 50/50. Also, cohabitants can now make claims on each other’s property in the event of a breakdown of the relationship, and this may encourage more people to agree on what the financial arrangements are to be in the event of a separation.