A prenuptial agreement, also referred to as a “pre-martial agreement” or “prenup”, is a legal document that sets out how a couple who are about to get married will divide their financial assets if they divorce in the future. The equivalent for those who are about to enter a civil partnership is a “pre-registration agreement”. Many people who are about to get married for a second or subsequent time draft a prenuptial agreement to ensure that any money, property, assets, and pensions they already own are protected in the event of divorce. If you are already married, you can enter a “postnuptial agreement” with your partner.
Should you get a prenup?
A prenup can provide much-needed protection for you and your children in the event of a relationship breakdown. A prenuptial agreement serves several purposes, such as:
- Provides certainty – a prenuptial agreement will allow you and your partner to agree at the outset of your marriage on how your finances will be split in the event of divorce in the future. This removes any uncertainty, time and stress of potential legal action if you disagree about how to divide your assets if you separate.
- Protects inherited money, assets or savings – a prenuptial agreement can be used to “ringfence” inherited assets from your partner in the event of divorce. This may include family heirlooms, a family business, or property acquired before the marriage. By ringfencing assets, the courts are much less likely to award a share of that property to the other party following divorce.
- Protects a child’s inheritance – this includes children from a previous relationship or marriage by ensuring assets are ringfenced for them. A pre-nuptial agreement can set out what should happen to any inheritance in the event of death.
- Allows a partner to keep full business ownership and separate in a marriage breakdown – A pre-nuptial agreement can protect your business interests and prevent disruption to the business if the marriage breaks down.
- Protects you from your partner’s debt – if your partner has significant debts, whether acquired in the past or the future, a pre-nuptial agreement can protect your assets from being used to satisfy those debts.
What can be included in a prenup?
Prenups can include a wide range of legal clauses, including:
- Transfer of matrimonial home
- Other property (whether in the UK or overseas) in separate or joint ownership
- Debts/liabilities
- Earnings, including future income
- Other assets, including savings, pensions, premium bonds, investments, businesses, and inheritances
- Financial provision by one party to the other
- Financial provision on death
- Compensation – i.e., where one party has suffered an economic disadvantage because of the joint decisions during the marriage for the benefit of the family.
- Joint gifts
As you can see, if you sign a prenup and get divorced, your assets can be split between you in accordance with the agreement. And in the event of a dispute, the courts will often take prenups into consideration when making decisions on how assets should be divided following divorce when drawing up a financial settlement order.
What cannot be included in a prenup in the UK?
It is important to note that certain provisions cannot be included in a prenuptial agreement; these include:
- Child custody and support – this includes the amount of child support to be paid, where the child will live and who they will spend time with, and decisions relating to religious practice, schooling and medical treatment.
- Anything that might be considered illegal, unfair or might encourage divorce
- Disclaiming child maintenance
- Assets owned by other parties
- Potential inheritances
- Intangible assets (e.g., a business idea)
- Personal and lifestyle matters
How to get a prenup
If you and your partner wish to enter into a prenuptial agreement, we recommend that you both:
- Seek independent legal advice from an experienced family law Solicitor who can advise you based on your individual needs and circumstances
- Consider your financial needs and those of your children in the event of separation
- Fully disclose all your assets openly and honestly
- Have a draft prenuptial agreement drawn up by your family law Solicitor
- Take the time to understand the agreement you are entering into and its future implications before signing your prenup
Your solicitor will guide you through the process of getting a prenuptial agreement, including explaining the advantages and disadvantages and the law in this area.
Are prenups legally binding in the UK?
Prenuptial agreements are not legally binding, but they do have a substantial impact on judge’s decisions in many cases. The UK Supreme Court ruled in the case of Radmacher v Granatino that courts should give effect to a nuptial agreement as long as:
- It is entered into freely by both parties – i.e., you both must enter into the agreement of your own free will, without any pressure from each other or another person
- Both parties have a full appreciation of the meaning and implications of the prenup – this is why it is so important to seek independent legal advice
- It would not be fair to hold the parties to their agreement – e.g., it may be unfair if the agreement leaves one party with less than their needs met while the other party is comfortably provided for.
How much does a prenup cost in the UK?
The cost will depend on the complexity of your agreement and financial arrangements and the extent to which you both provide full disclosure of your financial assets.