We are often asked whether prenuptial agreements only cover assets which the parties already have at the time of the marriage, or whether they can also protect future assets which the parties may receive later on.
Pre-nuptial agreements are not technically legally binding, though if they meet certain criteria they can be very persuasive to the court when dealing with the division of the assets on separation.
It is possible to include these future assets within a pre-nuptial agreement. This can include future assets and income which derive from a source which is already in place. For example, if a person has an existing business which they hope to protect in the agreement, then we could include any future increases in the value of the business. Another example could be a piece of land with a nominal value, but that could potentially be sold in later years for development for a vast sum, and this could be included to show that is has been thought about by the parties, and dealt with.
However, quite often, people will wish to try and protect assets they are not in possession of at all, and may not even receive. This would include things such as inheritances, or gifts from family. It is a very good idea to mention these specifically if they could arise.
Again, this is because it is more helpful for the other party to the agreement to be aware of potential inheritances/ gifts when deciding if they are happy with the terms of the agreement. It could avoid them saying: ‘If I had known about that, I would never have signed’.
Transparency is the best policy when dealing with prenuptial agreements. Many people would be comfortable at the time of their marriage in agreeing that if the other person inherits or is given a gift, that this would belong to the recipient, and so it makes sense to spell that out in the agreement to save any arguments in the event of a separation later on.
If you are considering a pre or post nuptial agreement and require legal advice, contact one of our family lawyers today:
T: 029 2034 2233
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Published: 22/05/19