What is a prenup?
A prenuptial agreement (prenup) is a written contract made by a couple before they get married. Typically, a prenup lists all individually and jointly owned assets (and debts) and outlines how the couple will divide this property in the unfortunate event of divorce.
When do I need to make one?
Some of the most common reasons for making a prenup include:
- You have substantial wealth and assets that you wish to protect.
- You run a business and want to ensure its future is protected.
- Your partner has accumulated significant debts.
- You have children from a previous relationship and want to ring-fence assets for them.
- You are marrying someone from abroad and want to be protected from financial awards made in another legal jurisdiction.
People don’t have to be a multi-millionaire to want a prenup. Some people want a prenup to protect themselves from their partner’s debt or to ensure they get a sentimental family heirloom. An example of an hierloom is a signant ring that’s been passed down generations.
How to get a prenup?
To make a valid prenup in the UK, you must ensure you meet all of the following safeguards:
- The prenup is made at least 28 days before marriage.
- Each party received independent legal advice on the agreement before the signing.
- Neither party hid any of their assets in their financial disclosure.
- There are no significant changes, which outdate the agreement. For example, the birth of any children.
- The agreement is fair to both parties. The division of assets isn’t weighted in one parties favour.
- Regular reviews and amendments are made to the prenup to keep both parties’ requirements up to date. It has become common for couples to include reviews of the agreement at agreed periods during the marriage to ensure a higher likelihood of the prenup holding up in court.
If all these safeguards are met, the court is more likely to consider the agreement.
What are the benefits of making a prenup?
The main benefits of making a prenup include:
- Protection of assets. A prenup can act as a ‘ring fence’ to protect any assets you own before the marriage, in addition to inheritance, interests in family businesses etc.
- Save time and costs during the divorce. Emotions can arise during a divorce, which can influence people’s ability to come to fair resolutions. Drafting a prenup before the marriage can save you both the uncertainty, time and stress of litigating about your finances if you do separate or divorce.
- Protection against debts. In an instance where one party comes to the marriage with significant debts to their name, the debt-free spouse can protect themselves from the liability of paying these debts.
- Transparency. When creating a prenup, both parties need to provide full financial disclosure. Therefore, both parties will know the value of each other’s assets and income from the marriage’s outset.
What are the considerations?
Before you enquire about getting your prenup drafted, there are some considerations you must first be aware of, which include:
- Not legally binding. Although the agreement isn’t binding, the agreement can still be valid in court if the prenuptial agreement safeguards are met.
- Can be expensive and time-consuming. In instances where couples can’t agree on the division of assets, they will need costly and lengthy legal negotiation to reach an agreement.
- Regular reviews. The agreement will need to be regularly reviewed, especially in circumstances where there is a birth of a child or one party loses their job. Regular reviews are required. The longer the agreement remains untouched, the higher the chance the court will see the agreement as outdated. However, each review will entail additional legal fees and opportunities for disputes over the division of assets.
- Unromantic. The build-up to a wedding is supposed to be one of the happiest and most romantic times of someone’s life. Therefore, as you can imagine, drafting an agreement on the division of assets in a divorce can be spark upset. Furthermore, the creation of a prenup can spark a sense of lack of trust.
- Unfair agreement. The drafting of a prenup is common during the couple’s “honeymoon” stage of their relationship. Therefore, there’s a high likelihood that one spouse may agree to unfavourable terms.
Are prenups legally binding in the UK?
Currently, prenups aren’t legally binding in the UK. However, the courts are increasingly looking at holding divorcing couples to these agreements, as long as the agreement is fair and meets all of the prenuptial agreement safeguards.
How much does a prenup cost?
Depending on how complicated the prenuptial agreement is, our family law solicitors charge from £1,800 plus VAT. However, suppose you’re looking to review a prenuptial agreement that another solicitor has made, we can do this on an hourly rate basis.
Is it possible to get a prenup after marriage?
Yes. Although it’s not called a prenuptial agreement. After marriage, you can get a contract called a ‘postnuptial agreement’ or ‘postnup’, which is very similar.
However, there is one key difference between the two agreements. A prenup governs the division of assets before the marriage, and postnups govern the division of assets during the marriage in the event of divorce.