Although it might not be the first thing you think of when getting engaged, for some entering into a Pre-Nuptial Agreement (often called a Prenup) it will save them a great deal of heartache, time and money, later down the line.
With the rate of divorce remains still relatively high, currently 42%, it is certainly worth thinking about and they are not just for the rich and famous.
- One of the most common reasons clients consider entering into a prenup is to protect inheritances people have already received from their parents and family remember or anticipate doing so in the future.
- You can better protect children from a previous marriage. Where someone might be concerned to ensure that their children from their first marriage still receive certain capital assets these can be ring fenced in the prenup to make sure that in the event of a divorce this still takes place. This also applies if someone dies as a prenup may award certain property to your children instead of your surviving spouse who may otherwise chose to give it to their family or other children.
- It’s an opportunity to openly share information about your finances with your future spouse and have a conversation about how you each would expect the finances to be shared if you were to separate. It’s surprising just how few people do this before getting married and yet having these conversations means you can go into the marriage with your eyes wide open and feeling prepared.
- It provides certainty. Often prenups are compared to having an insurance policy; something you hope you will never need but very useful if you do. They are also relatively inexpensive in comparison to the costs of a divorce where there isn’t one.
- They save significant time and costs in the event of a divorce. Without a prenup you may have protracted legal proceedings to resolve your finances which could take months, even longer, to resolve and can incur tens of thousands of pounds each, sometimes far more.
Whilst Prenups are not automatically legally binding in England and Wales, the Court and the Law Commission have set out clear steps that should be taken for the Court to give weight to the agreement, which should be entered into freely, with a full understanding of its terms and where the agreement is deemed to be fair. Provided the prenup meets these criteria it is highly likely that the parties will be held to the terms.