InsightsInsight - Agriculture and Rural - POSTED: October 12 2021
When ‘I do’ becomes ‘I don’t’ Post-COVID weddings: Protecting your assets
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With COVID-19 restrictions now completely eased, the wedding industry is almost certainly breathing a huge sigh of relief, as are the many couples who had to postpone their nuptials due to the pandemic.
For those preparing for the happiest day of their lives, the last thing many would consider is discussing future plans in the unfortunate event of a marriage breakdown.
As undeniably unromantic as this conversation may be, there is no getting away from the fact that it is a critical one to have. The unfortunate reality is that around 42% of marriages in England and Wales will end in divorce, according to the latest figures from the Office of National Statistics.
Pre-nuptial agreements – what you need to know
Many people in the farming community will have heard of a pre-nuptial agreement and how it can assist in protecting pre-acquired business assets, which have often been built up over generations.
Although pre-nuptial agreements are not strictly binding upon the courts, when certain criteria are met, they will be given great weight by a court considering the division of assets in the unfortunate event of a divorce.
Examples of these criteria include:
- Both parties providing full financial disclosure to each other.
- The receipt of independent legal advice for both parties.
- The agreement being fully negotiated and signed at least 21 days in advance of the wedding.
A helpful rule of thumb is to have agreed and signed the document before the wedding invitations are sent. It is this last ‘21 day’ point which often catches couples out and can prevent them from entering into an effective pre-nuptial agreement.
Pre-nuptial agreements – not the end of the story
What many do not realise, however, is that a pre-nuptial agreement is not the end of the story. If a couple have not managed to negotiate and settle a pre-nuptial agreement in good time before their wedding, they can still enter into a similar agreement – known as a post-nuptial agreement.
A post-nuptial agreement is negotiated in much the same way as a pre-nuptial one. It remains compulsory for both parties to provide open and honest financial disclosure and to reach an agreement which is fair to them both in all the circumstances.
One particular advantage of negotiating agreements after a wedding is that, often, a party trying to go back on a pre-nuptial agreement will claim that the other party ‘forced’ them to sign the agreement by providing an ultimatum along the lines of ‘sign the pre-nup or I won’t marry you’.
Where negotiation takes place after the wedding, this claim of duress is removed. What’s more, provided all the other relevant criteria are met, it is likely that the agreement will actually be given more weight by a court than a pre-nuptial agreement might otherwise have been.
It is also worth noting that post-nuptial agreements cannot only be utilised immediately after a wedding; they can also be entered into at any point during the marriage. For example, when one party to the marriage comes into wealth or assets from a third-party source, such as an inheritance.
Any nuptial agreement can be useful to those marrying for a second time, particularly when seeking to ensure that children of a first marriage are protected within the family legacy. This consideration is particularly relevant to those in the agricultural community who may wish to ring-fence shareholdings in family farming business and assets.
This article was first published in the October 2021 edition of South East Farmer.
This content is correct at time of publication
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