Pre Nuptial Agreements

When we marry, we sincerely hope that it will be ‘to death us do part’, but sadly statistics show that over forty per cent of marriages fail in the UK. This is a risk which cannot be ignored, particularly if you benefit from inherited wealth, offshore trusts, property, or business interests which could be vulnerable in the event of a divorce.

A prenuptial agreement is a formalised legal contract between two people before they marry or enter a civil partnership. It provides protection, particularly in regard to pre-existing wealth and business interests, as the agreement will stipulate how all assets, and sometimes liabilities, will be distributed in the financial settlement if the relationship breaking down.

A prenup should be considered akin to life insurance. We all hope we won’t have to use it, but it can provide vital peace of mind knowing it is there.

The benefits of a prenuptial agreement

Often one person comes to a marriage with more wealth than their partner and they, or sometimes even their extended family, may be worried about protecting those assets. This is particularly so for high-net-worth individuals and those involved in family or privately run businesses. Divorce can have significant financial implications for other family members and colleagues if cash or assets have to be extracted from a business.

The main benefit of a prenup is that it provides clarity to you both and will help to alleviate any fears about losing assets that you, your partner or family members may have. For example, it is not uncommon for parents to insist on a prenuptial agreement before gifting significant sums or business interests to the next generation.

As well as protecting pre-existing wealth, a prenup can also cover assets which you expect to acquire in the future, such as an inheritance or business shares.

It can also be beneficial for people who have concerns about arrangements for children from a previous relationship and want to ensure they are financially looked after.

A prenuptial agreement can be very flexible in the issues it covers. For example, we have represented a number of high-profile individuals where privacy is key. In those cases we have been able to include non-disclosure clauses to protect their private lives.

Additionally, if there is the possibility of an international divorce, this may be due to one or both of you previously having lived abroad, or being foreign nationals who relocated to the UK, then we can specify that you intend for any divorce proceedings that may arise to be taken in the UK. This may shield you from harsh foreign laws over division of assets. This will be subject to you meeting the jurisdiction requirements in the UK which are discussed further here international divorce.

While some people may believe such legal agreements are unromantic or unduly pessimistic, many clients prefer the certainty that prenuptial agreement offers, and find that the negotiations enabled them to talk more openly about financial matters before they married.

When to negotiate a prenup?

If you have wealth to protect and are considering getting married or entering a civil partnership, then you should talk to your lawyer as soon as possible. Our expert family solicitors in London have negotiated numerous prenups and will advise you on broaching the subject if you have not already done so.

It is very important that discussions around a prenuptial agreement begin long before the wedding day. Indeed, signing one close to your big day could potentially impact on its validity as it may be deemed to have been signed under pressure.

How to ensure your prenup is valid

Prenuptial agreements are not yet legally binding in England. However, since 2010 our courts have shown increasing willingness to abide by the terms provided it has been entered into properly.

There are a number of requirements needed to be able to convince a court that your agreement should be considered binding, which are:

• you have each taken independent legal advice on your rights and the implications of the agreement;
• there has been a full disclosure of all assets and liabilities;
• the agreement allows for future family changes, such as if children arrive or someone becomes seriously ill and unable to work; and
• neither of you has been unduly pressurised into signing.

What to expect from our prenup lawyers

One of our expert lawyers will talk to you about your circumstances and your objectives, and will advise you on the steps needed, including what financial disclosure you will have to make. Getting this information together promptly will help expediate your case, enabling you to focus on your wedding and future life together.

We will then liaise with your partner’s lawyer and draft an agreement reflecting what you both agree, ensuring all formalities are followed. Our team of expert lawyers has vast experience in helping wealthy individuals, including expats, elite athletes and celebrities, to reach an agreement which provides peace of mind in regard to the financial fallout from a potential divorce.

We will advise you on the technical requirements needed to enable your agreement to be upheld by a court, and we will deal with your case sensitively to ensure no ill feelings arise prior to your big day.

Your next step

Obtaining early legal advice is vital when entering a prenuptial agreement, as delay can impact on the validity of your agreement. We will usually be able to offer a fixed fee quotation for a prenuptial agreement, so there would be no hidden costs or nasty surprises.