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Prenuptial agreements

Prenuptial agreements – also known as ‘prenups’ – are legal documents that outline exactly what will happen to your assets and children if you get divorced. Our experienced solicitors can help make sure you and your partner are well-protected from any future disagreements.

Before getting married, it’s very unlikely that you or your partner will be thinking about divorce and the burdens it could bring. Unfortunately, with two out of five marriages ending in divorce, it is often necessary to think about this outcome.

It is in everyone’s best interest to ensure there’s a plan in place for a clean, co-operative separation if things don’t work out.

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Traditionally, courts in England and Wales have been hostile towards prenuptial agreements, often dismissing prior agreements completely. However, following the 2010 Supreme Court judgement in the case of Radmacher v Granatino, this has begun to change.

Ms Radmacher had a predicted net worth of around £100m. Her ex-spouse Mr Granatino signed a prenuptial agreement stating he would not claim on her wealth if they broke up. When they divorced, he made a claim anyway and was awarded £5.85 million from a High Court judge in 2008.

When Ms Radmacher appealed the decision, the court ruled that the terms of their prenuptial agreement should have been taken into account and her appeal was successful.

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The Supreme Court decided that equal weight should be given to the terms of a pre-nuptial agreement, as long as:

  • Each party freely entered into the agreement
  • Both parties fully understood the terms of the agreement at the time
  • It would be fair in the circumstances of the case to uphold it

Following the Supreme Court decision, the Law Commission then took this change one step further by drafting the Nuptial Agreements Bill to reform the existing UK law. Prenuptial agreements are now legally binding, reducing the court’s power to make financial orders on a divorcing couple.

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Why should couples create a prenuptial agreement?

It is a common misconception that prenuptial agreements only benefit wealthy couples.

This is not true. The Law Commission’s report highlights a range of examples where a prenuptial agreement would benefit anyone.

For instance, when:

  • One of you has specific personal assets that they wish to protect, such as inherited wealth or a business
  • You have children from a previous relationship or marriage
  • One of you thinks they might come into wealth after marriage
  • You have come to the UK from a country where pre-nuptial agreements are commonplace

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Benefits of having a prenuptial agreement

Less stress

Divorces are often complicated and can sometimes become hostile. By agreeing at the beginning how your finances will be shared, you can usually avoid hostility down the line. Divorce negotiations and mediation can become a lengthy process, especially when you can can’t reach an agreement outside the courts.

Transparency

One key condition of a prenuptial agreement is that you reveal all your assets and income. This means you both know the other person’s financial position right from the start. Revealing your finances is a standard step in a divorce. Doing it before you marry helps to avoid surprises and unforeseen complications for you both.

Compensation

Typically, if one of you gives up your career to care for the family, a prenuptial agreement ensures that share is increased to reflect those lost earnings.

Without a prenuptial agreement that states this clearly, it is unlikely the court would ever award it. A spouse who has given up their earnings for the benefit of the family will then find themselves in a difficult financial position for years to come.

Potential to save money

Drafting a prenuptial agreement is a lot less expensive than paying lawyers to negotiate a divorce. Divorce proceedings can last a long time if children and large assets like property are involved. A prenup is a simple way to avoid this costly process.

Protecting assets

A prenuptial agreement may be especially valuable if you want to protect certain assets, such as inherited properties or family heirlooms.

If a prenuptial agreement protects certain specific things, the court is unlikely to award a share in that property to your spouse should you divorce.

If either of you has children from a previous relationship, a prenuptial agreement can also protect those children by protecting assets they will be entitled to.

Debt protection

If your partner has large debts – or gets into debt later – a prenuptial agreement can protect your assets from being used to pay them off.

Even after divorce, your assets can be at risk from debts if you didn’t reach a clear agreement at the time.

Protection of business partners

Prenuptial agreements can protect any interest one of you has in a small or family private business. A prenup can prevent disruption to the business, should things go wrong at home.

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The future of prenuptial agreements

Legally binding prenuptial agreements

In the future, the law will probably give prenuptial agreements more weight, making them a lot more popular.

For a prenuptial agreement to be legally binding it needs to be drafted in the proper format and in a certain way.

  • It has to meet both of your financial needs, and those of any children you have
  • It must be validly executed as a deed
  • It must have been made more than 28 days before your wedding or civil partnership ceremony
  • Both of you must receive financial disclosure about your partner’s financial situation before you sign
  • Both of you must receive legal advice at the time you sign

While the above steps may seem like an unpleasant and daunting task, the advantages of ‘the prenup’ speak for themselves.

A prenuptial agreement can save you and your partner high divorce costs, bitter court battles and emotional distress.

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Legally binding postnuptial agreements

Like prenuptial agreements, postnuptial agreements are also becoming more popular.

Postnuptial agreements are similar to prenuptial agreements, however they are set out and signed after you and your partner are married, not before. They still exist as a way for couples to make sure that their finances are taken care of if the worst was to happen.

Prenuptial and postnuptial agreements both contain the same information and have the same legal status. The only difference is whether you’re married when they are set up.

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How we can help

At AWH Solicitors, our experienced family law solicitors can help you draft a post or a prenuptial agreement.

This way you and your partner can have complete peace of mind, knowing all your financial arrangements are taken care of if you get divorced.

To learn more about what we can do for you call today, or request a call back.

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Our Fees

Our services regarding post and prenuptial agreements will be priced with your specific situation in mind. However, in general, post and prenuptial agreement fees are as follows:

post and prenuptial agreements
General costs from: £1,000
VAT from: £200
Total from: £1,200

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