When ‘I do’ becomes ‘I don’t’ - Protecting your assets pre and post nuptials
Why a pre-nuptial agreement?
With the wedding season now in full swing, with couples of marrying later in life or with assets already in tow, couples often give thought to their financial situation prior to the big day and whether they should enter into a pre-nuptial agreement. By being open with each other and discussing their financial expectations prior to their marriage, couples are demonstrating their change in attitude, being pragmatic in their approach to marriage, and are putting provisions in place as how financial matters are to be dealt with should their marriage for one reason or another break down.
A pre-nuptial agreement (also known as a pre-nup) is not just reserved for celebrities and the wealthiest clients but are also widely used by couples to set out their financial expectations. A pre-nup is a formal, written agreement between two partners that sets out the ownership of all assets and future income and explains how the assets will be divided in the event of a breakdown of their marriage.
Whilst pre-nups are not strictly binding in the event of a future divorce, namely the court currently retains the discretion as to whether or not the terms of a pre-nuptial agreement should be upheld, they are afforded heavy evidential weight within the UK when the settlement agreed is considered to be fair. Money can be an extremely emotive topic in a relationship, especially when a couple has different attitudes towards spending and saving, and a pre-nup sets out a clear agreement that can lead to peace of mind for both parties.
If you are finalising your wedding plans, you may wish to consider entering into a pre-nuptial agreement for the following reasons:
- You may want to protect inherited money or assets, to safeguard substantial savings, or make provisions for expected future inheritance.
- If either of you have children from a previous relationship, you may want to ensure certain assets are reserved for them to protect their inheritance rights. (It is also crucial to make a Will for the same reason)
- You may wish to agree how financial issues are to be resolved between you in the event that your marriage breaks down.
- If you own a business you may need to ensure that this is protected from any future divorce
- If your partner has substantial debt, a pre-nuptial agreement with a ‘debt clause’ can protect you from being liable for that debt.
In order for a pre-nup to be of use in the future, the agreement needs to be fair and entered into by both parties without pressure. The agreement must also be prepared with the benefit of financial disclosure, independent legal advice and in good time before the wedding. Considerable thought will need to be given as to the terms of the agreement to ensure fairness, as there is no one size fits all.
How we can help with the preparation of pre-nuptial agreements
At Brachers LLP we can assist you with the preparation of a pre-nuptial agreement. We take a sensible approach in assisting you to secure the best outcome for you and your family. If you wish to learn more about pre-nuptial agreements please contact our Head of Team Mei-Ling McNab to book an appointment.
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