Should I get a pre-nuptial agreement?
When you get married, you gain the right to make certain claims over the income, assets and pension of your spouse in the event that the marriage breaks down and ends in divorce.
That means that you can ask the court for an order that, say the family house is sold or transferred into your name or that your spouse’s pension fund should be divided so that you obtain a pension in your own name. The purpose of these claims is so that the court can make sure that people obtain a fair outcome if they are not able to reach an agreement between themselves.
That can be really useful for some people, however there are others who would rather be able to say at the outset what they would like to happen to their finances if their marriage breaks down. In which case it may be useful to have a pre-nuptial agreement.
The law states that a court should give effect to a pre-nuptial agreement as long as it is entered into freely by each party with a full appreciation of its implications, unless in the prevailing circumstances it would not be fair to uphold it.
This means that if both parties have provided full information about their respective financial positions and have had independent legal advice (so that they are each clear as to the potential claims, including the extent of them) the agreement is likely to be upheld. In addition, it is good practice for pre-nuptial agreements to be prepared well in advance of a wedding (and at least 21 days as a minimum) so that people do not feel pressurized into signing them on the eve of the big day, when they may not feel able to raise any objection.
What are the advantages?
• Property can be clearly identified at the outset
• You can agree how your finances would be divided if you later divorce
• You can ring-fence assets for children from earlier relationships
• You can prevent disruption to your business by stipulating whether any property is a business or a personal asset
• It can save you time and money in the long run when reaching a financial agreement
What are the disadvantages?
• It can be a difficult topic to raise with your partner
• Can make one party financially vulnerable
• A change in circumstances, such as the birth of a child can undermine the agreement
• It is important to appreciate that no agreement between the parties can override legislation or prevent a judge from deciding on the appropriate division of assets on a divorce. This means that a pre-nuptial agreement cannot absolutely stop a spouse applying to the court for financial provision from the other spouse.