What is a prenup and do you need one?

Last updated on December 15th, 2020 at 09:41 pm

Prenups have long been associated with the rich and famous, leaving many couples believing it’s not something they need. However, a prenup can suit many different financial situations and protect spouses from potentially messy divorces

However, in a recent survey conducted by Graysons Solicitors, nearly a third of Brits disagreed with getting a prenup stating it ‘shows a lack of trust’, while one in eight said it wasn’t a romantic start to marriage.

Although most couples enter marriage hoping it will last, preparing for the worst-case scenario can eliminate the risk of an unfair divorce agreement. Nearly a fifth of people agreed with prenups saying ‘you never know what the future holds’.

Bradie Pell, partner and head of the family solicitors team at Graysons Solicitors said: “While it isn’t essential that couples get a prenup, it’s worth considering. It doesn’t have to be unromantic. Although marriage is a celebration of love, it comes with several legal consequences which I think more people are taking into consideration before making this commitment.

“Having this discussion before getting married can show the relationship is strong enough to withstand difficult conversations.”

Despite these results, over a quarter of respondents didn’t know what a prenup is. So, here’s what you need to know.

Protect your assets with a prenup

A prenup, short for a prenuptial agreement, is a contract that sets out what would happen to each spouse’s assets in the event of divorce or death instead of leaving it to the discretion of the court.

“A prenup is often arranged when one partner is substantially wealthier than the other but there are many other reasons a couple may decide to get one drawn up, such as entering a second marriage after already facing a messy divorce,” Bradie added.

Assets can include property, trust funds, expected inheritance and pension pots. Prenups can also protect ownership of a business.

Once married, assets become matrimonial assets that are owned by both you and your partner unless protected through a prenup. In the Graysons Solicitors survey, over one in ten said prenups are the fairest way to protect assets.

If either partner has children outside of the relationship, a prenup can protect their inheritance rights and ensure particular assets are reserved for them.

A debt clause can also be added into a prenup to prevent one spouse from being responsible for half of any debt their partner acquires.

How do you form a prenup?

A solicitor who specialises in family law should draw up the document to ensure it’s effective and taken seriously by a court.

Bradie said: “A well-drafted prenup should meet individual requirements and eliminate the possibility of legal loopholes being found.”

Both partners need to enter the agreement freely and willingly and receive independent legal advice from different attorneys.

“Hopefully you won’t need the prenup but if you do the solicitor will keep a copy of the contract on file and give one to each partner to keep,” Bradie continued.

Can you change your mind?

The prenup terms can be changed after tying the knot, if both partners are willing and agree. If a couple weds without a prenup they can have a postnup drawn up any time after getting married.

Bradie said: “Couples may decide to get a postnup if they have children or if their financial situation changes such as if either partner unexpectedly inherits a large sum of money or if one spouse leaves their profession to become a full-time parent.”

You can still settle your finances in court during divorce proceedings even if you’ve signed a prenup but it may or may not still be upheld.

“If you don’t want to sign the prenup there is no legal obligation to do so,” Bradie added. “You can discuss negotiating the terms but don’t go ahead with the agreement if you aren’t happy with it or don’t fully understand it.”

Are prenups and postnups legally binding?

Prenups and postnups aren’t currently legally binding in the UK but following the 2010 case of Radmacher v Granatino where the UK Supreme Court ruled in favour of the prenup, a court is likely to uphold it. However, in some instances, it won’t be taken into account, such as:

• • if the prenup wasn’t finalised at least 28 days before the marriage
  • if either partner was pressured into signing the contract
  • if the division of assets isn’t fair or realistic
  • if either partner failed to fully disclose their assets
  • if the prenup was poorly drafted
  • if absurd provisions are included e.g. about weight gain or sexual relations

Bradie said: “If the prenup wasn’t completed at least four weeks before the couple married, the court might assume it was rushed or one party was pressured into signing it and consequently overthrow it.”

Preparing for divorce before even walking down the aisle may seem counterproductive but it’s a responsible and sensible way to plan for the unexpected and gain peace of mind.