When deciding to get married, discussions about pre-nuptial agreements may, understandably seem unromantic, but they can be important documents to consider for couples to help to protect their assets, and to clarify expectations before entering into marriage. A pre-nuptial agreement allows couples to outline the distribution of assets in the event of separation or divorce. It can mean clear guidelines are set out, so that matters such as pre-marital assets, business interests, inheritances, and other assets of value are safeguarded, which can reduce potential disputes between couples.
Discussions relating to financial arrangements can often be a difficult subject to broach, but a pre-nuptial agreement allows an open discussion of financial expectations and obligations, and with that discussion and transparency, it can reduce conflict relating to financial arrangements and can mean that there is less likelihood of dispute in the future.
As well as providing protection for pre-acquired assets, a consideration with regard to pre-nuptial agreements is that they can also include provision regarding future financial assets, to try to ensure that they are preserved for the wellbeing of both spouses and any relevant children, and for example, can be of assistance if financial security is something that one or other party wishes to consider with regard to children from a previous relationship and, factoring in anticipated children from the marriage they are entering into.
If a situation comes about where there is a divorce or separation, this in itself can be a difficult and emotional time, but having a pre-nuptial agreement in place can help streamline the legal process by providing a clear framework for asset division, and likely reducing the time, expense, and acrimony that can, on occasion, be an issue with regard to marital breakdown.
Pre-nuptial agreements are becoming increasingly popular in circumstances where parties are planning to marry, particularly, where there are substantial assets to consider or, where circumstances are such that specific arrangements need to be dealt with in a particular case. Pre-nuptial agreements are not legally binding in the UK as things stand at the moment. However, the way in which they now tend to be considered by the Court is from a standpoint of why, in the first instance they should not be followed, rather than someone having to start from the standpoint as to why they should.
It is more likely that a Court will be prepared to uphold a pre-nuptial agreement if it adheres to the guidelines that are now well established in relation to requirements for the same.
The Court would want to be satisfied that the parties were not under any duress or pressure to sign the document, and as a result, it is a requirement that pre-nuptial agreements are finalised and signed at least 28 days in advance of the wedding.
There also needs to be financial disclosure of the parties’ assets, to try and avoid issues being raised later of one party saying they would not have signed it if they had known the financial position of the other, and transparency is therefore important in that regard.
The pre-nuptial agreement should not be one which is manifestly unfair to one of the parties, and the provisions within the same should be reasonable, taking into account the circumstances of each party.
It is very important that both parties have independent legal advice in relation to a pre-nuptial agreement, and it must be an enforceable contract. There must also be consideration given to review clauses in the document to take account of a situation whereby things can change over a period of time.
By meeting the above criteria, it gives parties the best chance of a Court taking the view that a pre-nuptial agreement should be followed and upheld.
Whilst a pre-nuptial agreement cannot oust the ability of the Court to make orders, or to deal with things differently upon separation/divorce, and it retains a wide discretion as to dealing with financial matters, if pre-nuptial agreements are dealt with in a proper way, with legal advice, it is something that would very likely be a significant factor that the Court would take into account when considering financial matters, and by providing an agreed framework to deal with matters from the outset, it may well also assist in relation to there not needing to be litigation between the parties in any event.
Author: Sarah Wyburn