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Pre and Post Nuptial Agreements
As more and more couples are delaying getting married or are entering into a second or subsequent marriage it is often the case that one or both of them has assets which they have accumulated whilst single or in a previous relationship and which they wish to preserve in the event of their marriage breaking down.
That can be particularly pertinent when they have dependent children. Although the court in England and Wales will not yet allow couples to contract out of the court's jurisdiction it has over time become accepted that a Pre or Post Nuptial Agreement which has been properly entered into will be considered a relevant circumstance by the court and is likely to be upheld. In order to be properly negotiated the requirements are that the Agreement must have been negotiated with the assistance of solicitors, there must have been an exchange of financial disclosure between the parties and the Agreement must be fair on the face of it.
In relation to pre nuptial agreements it is also important that the Agreement is entered into sufficiently ahead of the marriage to avoid there being any possible assertion that there has been duress. Our specialist team of family lawyers are experienced in advising when a Pre or Post Nuptial Agreement is appropriate, the matters to consider when entering into such an Agreement and in the preparation of Agreements to take account of all circumstances.
CLIENT GUIDE TO PRENUPTIAL AGREEMENTS
What is a Pre-Nuptial Agreement?
Couples that are planning to enter into a marriage or civil partnership often decide to enter into an agreement that shows what they intend to happen to their money and property if the relationship breaks down. It is a contract which seeks to regulate the affairs of both parties in the event that their relationship ends.
Are they legally binding?
Pre-nuptial agreements are not strictly legally binding on the Court at present in the event of a later divorce or dissolution. The court in determining what should happen on breakdown are obliged to consider a variety of factors including the income, earning capacity, property and other financial resources which each party has as well as their financial needs, obligations and responsibilities both now and in the foreseeable future. In considering whether the agreement is affair, the court would consider what financial order would be made on divorce/dissolution. It is possible that the Court will respect the agreement that is already in place between the parties unless the effect of the agreement would be unfair.
In order to do the best job of ensuring that the court will consider the agreement to be fair and necessary to rely upon, both you and your intended spouse/partner will need to set out your financial circumstances in full and take independent legal advice upon the agreement and its effects. You can negotiate an agreement with the assistance of mediation or collaborative law, or more traditionally by instructing an individual solicitor each to talk to each other on your instructions.
It is good practice to get the agreement finalised in good time before the wedding or civil partnership ceremony so that neither of you feels under any undue pressure to agree to anything.
Agreements are less likely to be considered unfair if they are recent or if circumstances have not changed since it was entered into, and both parties knew exactly what they were agreeing to, both legally and financially without any undue pressure being applied. Agreements should be regularly reviewed and amended to take account of any changes in circumstances.
The Court can uphold part of the agreement, but not all if they consider a different part to have an unfair effect.
What does a Pre-Nuptial Agreement cover?
It is a bespoke agreement drawn up for the two of you in relation to your particular circumstances, so it can cover almost anything you want it to. There are certain things a couple should consider when they are deciding how they would want to work things out if the relationship does break down:
- What would happen to the property that either of you brought into the relationship?
- What would happen to the family home?
- What would happen to any property given to you or inherited during the marriage or any income or assets derived from trusts?
- What would happen to money held in joint accounts and any property purchased jointly?
- What would happen to any saved money accrued during the relationship?
- What would happen to your pensions? How would you deal with any debts?
- Would either of you pay or receive maintenance and, if so, for how long?
- What events might happen that would require the agreement being reviewed?
- What arrangements would you like to make for any children you have or are likely to have, both in financial and practical terms?
What happens if we have children?
A pre-nuptial agreement cannot prejudice the interests of any children in your family. It is usual to build into the agreement a provision for a review of the document if and when you have children, so that their needs can be considered and assessed at that time, with possible changes being made to any expectations of the adults.
In the event of a divorce or dissolution, if the Court is asked to intervene in relation to financial matters its first consideration will always be the welfare of the children involved. If the Court considers the agreement made between the adults may adversely affect the children, i.e. by restricting any expectations of a lifestyle they would otherwise have had, the Court is likely to consider that the agreement is not fair and will not uphold it.
It is not possible to contract out of giving financial support for a child.
This guide is intended as an outline only of the procedure. It is NOT intended as a substitute for proper legal advice. Each case is different and advice cannot be given without a proper analysis of your own circumstances. For further advice and information please contact any member of the Family Team at Andrew & Co.
To speak to a member of the Family team and make an appointment, please phone us on 01522 512123 (Lincoln) or 01636 673743 (Newark).