Further to my recent blogs on Financial Planning and Divorce which you can read here: Financial Considerations on Divorce, Pensions and Divorce and Financial Advice and Divorce, this blog looks at pre-nuptial agreements, what is a pre-nuptial agreement? and how these can protect your finances upon divorce. It is not very romantic. Splitting up is not something we want to think about when we are getting married. But pre-nuptial agreements are becoming more common place. Especially where one party is bringing more to the table than the other (so to speak).
As previously written, there are many financial advantaged to marriage (you can read that article here). However, a pre-nup can help ensure that marriage and potential divorce does not lead to a financial disadvantage.
What is a pre-nuptial agreement?
A pre-nuptial agreement establishes the property and financial rights of each party prior to a marriage. In the UK, these are not yet legally binding. However, a Judge is likely to take the agreement into account in the event of divorce. In a number of cases, these have been upheld.
What are the advantages of a pre-nup?
A pre-nuptial agreement allows each party to jointly agree how specific property and assets are viewed should the marriage end in divorce. For example, whether a property is solely owned by one party and would therefore be theirs on divorce or if it is jointly owned asset of the marriage in which case it would be split on divorce. It is designed to protect an individual’s assets from financial ramifications of divorce.
They can also determine how assets would be split upon divorce.
Why would you get a prenuptial agreement?
If you are getting married (or even if you are married), you might think about getting a prenuptial (or post-nuptial) agreement for the following reasons:
- There are assets and/or property that would be hard to split 50/50
- You want to protect specific or inherited money or assets (or future expected inheritances)
- If you or your partner has children from a previous relationship and you wish to ensure their inheritance is protected and/or certain assets are preserved for them
- You want an input into how finances would be divided in the event of a marriage breakdown
- You or your partner own a business which they’d like to retain control of
- If either party has outstanding debt, a prenuptial agreement with a ‘debt clause’ can protect you from being liable for that debt
To find out more about pre-nuptial agreements, there are a number of specialist family solicitors who will be able to help.