What is a Prenuptial agreement?
A prenuptial agreement is essentially a contract drawn up by the lawyers of those wishing to enter into a marriage but wish to protect any assets they own prior to that marriage. It is however not currently legally binding and may only be considered by any Judge when dealing with the finances within a divorce. A Judge will consider if the agreement is fair and if reasonable provision has already been provided for when it comes to any children of the marriage. What would be a fair Prenup?
The case of Radmacher v Granatino  UKSC 42 provided the first significant judgment about the status of prenuptial agreements. The Supreme Court set out the following three factors that increase the likelihood of a prenuptial agreement binding the parties:
- The agreement must be freely entered into by both parties. It is important that each party gets independent legal advice. This will help illustrate that each party entering into the agreement was aware of the terms of that agreement and gave their consent to entering into it after obtaining legal advice. This can also demonstrate that there was no coercion or pressure to enter into the agreement.
- The parties must be aware of the implications of entering into the agreement. Both parties must be aware of each other’s financial positions before entering into the agreement. Transparency is key. This will help convince any considering court that both parties were aware and conceded what they would be likely to give up upon signing the prenup.
The agreement can’t be unfair. If holding a party to the prenup agreement results in unfairness then it is less likely to be followed. In determining settlement in any financial remedy proceedings, Judges will make sure the financial needs of any children of the marriage and that of the financially weaker spouse are first met. Any prenup must take this into consideration or will be in danger of being disregarded. The duration of the marriage and any financial changes during the marriage will also determine what impact the prenup agreement has on financial remedy proceedings. That said pre-nuptial agreements are rising in popularity as couples seek to protect inherited family wealth. There is however a suggestion that couples that do seek Prenup advice do not actually then go through with the wedding. Maybe this is a good thing that these things were ironed out before marriage that may have resulted in divorce anyway!
Many clients do see the prenups as a form of insurance policy and if approached correctly can work well to protect family assets and property that cannot necessarily be divided e.g. jewellery and inherited land. If you are interested in entering into a prenup, ensure that you have taken the required legal advice first. Good lawyers may encourage the parties to enter into a discussion together with their legal representatives in order to get consensus as to the finances and the eventual prenuptial agreement.
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