Prenuptial agreements: get to know the basics

The concept of a prenuptial agreement entered into by a couple prior to getting married was

one which used to be seen as the preserve of high-net-worth individuals and celebrities, but

this has changed in recent years with lots of couples now far more likely to enter into second

or third marriages later in life following divorce or bereavement.

In cases such as this, people are far more likely to have already amassed some level of

personal wealth during their lifetime, and they are also more likely to have children from a

previous relationship. In circumstances of this kind, it’s only natural for people to want to

protect the assets they bring to the marriage, especially if there is an imbalance in wealth

between the couple.

Prenuptial agreements set out how any assets a person brings with them when they enter

into a marriage will be divided in the event of a divorce.

Whilst they are essentially contracts, drafted by legal professionals, and formally agreed and

signed by both parties, legally speaking, prenuptial agreements are not binding. However,

following several landmark rulings in recent years, the situation has become more nuanced.

These days, pre and post nuptial agreements are considered by family courts to have a

‘magnetic importance’ that should be complied with unless it can be demonstrated that they

were unfairly drawn up or would have an effect that is unfair.

It should be noted that prenuptial agreements are far more likely to be upheld by a court

considering post-divorce financial arrangements if it has been entered into in the right spirit.

In the event that a prenuptial agreement is contested in court, there are certain

considerations that will be made to decide if the contract is valid:

 Did both parties agree to and sign the prenuptial agreement, and was independent

legal advice sought before agreeing to the terms?

 Did both parties fully disclose the assets they bought with them into the marriage?

 Was either individual placed under any pressure to agree to the prenuptial

agreement?

 Was the prenuptial agreement drafted less than 21 days before the date of the actual

wedding or civil ceremony?

As well as being drafted in accordance with these strict conditions, a prenuptial agreement

should be revisited periodically and revised if needed in order to reflect any shift in the

financial status of the two parties. A failure to do so could result in a court deciding that the

agreement was no longer fair.

The details likely to be included in any prenuptial agreement include the following:

 The assets belonging to each party, such as stocks and shares, savings and

properties

 An explanation of what will happen to the family home in the event of a divorce

 Details setting out who will be responsible for clearing debts amassed by either party

during the course of the marriage or civil partnership

 Details of the assets which the children of any previous relationships will be entitled

to following any divorce proceedings

 The birth of any child to the parties during the marriage

As well as being signed by the parties themselves, prenuptial agreements need to be signed

by two independent witnesses: one on behalf of each party. The witnesses need to be over

the age of 18 and can’t be family members. As well as their names, signatories need to set

down their address and details of their employment.

It is always sensible to seek legal advice before devising or signing any agreement of this

nature. Whilst not strictly ‘legally binding’, those drafted without following the appropriate

protocols will be far less likely to stand up to scrutiny and could result in assets being

apportioned unsatisfactorily upon the failure of a marriage.