Not quite so exciting as the proposal – and the ring of course – but equally valuable, is considering the practical side of marriage – such as property and finances. These subjects are definitely not romantic but, as arguments about them are the cause of many marriage breakdowns, getting that part of your relationship right from the very beginning can be vital.
A prenuptial agreement probably isn’t on your Christmas list, but planning one now could be a very practical gift from each of you to the other. Prenups, as they are often called, used to be fashionable only amongst the rich and famous. However, they are now, quite rightly, taking their place as an increasingly popular contract for everyday couples, particularly where previous relationships and assets exist; where there is a family business that needs protection; where there’s a disparity of existing wealth or when there is an existing or anticipated inheritance to consider. Also, as increasing house prices mean that couples are often unable to get on the property ladder without help, the ‘bank of mum and dad’ regularly comes to the rescue and parents are looking for ways of protecting their investment.
There remains a misconception that it’s not worth getting a prenup for fear it won’t be upheld, when the reality can be the opposite, provided it’s drawn up properly, by someone who knows what they are doing, such as an experienced solicitor. Also, it should be in writing; both parties should have taken legal advice and given full financial disclosure of their respective assets; it should have been negotiated between you and terms not imposed on one of you by the other, and you cannot pressurise your future spouse into signing it – it must be voluntary.
It’s true that prenuptial agreements are not, as yet, legally binding, however, the courts are taking them into consideration more and more and the Law Commission also published a report in February 2014 recommending they should be legally binding, provided that, amongst other things, the agreement is freely and willingly entered into without undue influence or misrepresentation; the prenup is signed at least 28 days before the wedding; there has been full financial disclosure and both parties must have received legal advice. The better the agreement that is written – the more chance it stands of being taken account of in the courts if there is ultimately an argument as to how financial assets should be divided.
Reform is likely in the future, but for now, the leading case relating to prenuptial agreements, and one which stands as solid case law today, is that of Granatino-v- Radmacher (2010). In this case, the Supreme Court decided to uphold an existing prenup, meaning the husband’s settlement plummeted from £5m to £1m.
Prenuptial agreements can be entered into by opposite sex or same sex couples who are getting married or entering into a civil partnership. If you are not getting married and opting to live together, but still want to protect assets, such as property and money, you could enter into a cohabitation agreement. Providing it is properly written, this can document what assets you are bringing into the relationship, what you are going to contribute, how assets will be divided on separation and what responsibility you will have for any children should you split up.
Of course, when you exchange your wedding vows, you will expect your marriage will last forever – and we hope it does. But with over 40% of marriages ending in divorce, it could be sensible for you to embrace prenuptial discussions now, whilst your relationship is strong, so that the potential stress, uncertainty and cost of divorce is minimised by making clear provisions for your future.
Partner and head of Graysons’ family department, Bradie Pell, says
“There is certainly a place for prenuptial agreements in our legal system, as long as both parties have full legal advice and are fully aware as to each other’s financial positions. Whilst prenups are not currently legally binding, they can assist to show the intention of parties in respect of the division of their financial assets if the relationship unfortunately breaks down. The aim of prenuptial agreements is to allow the parties to have some control over the division of their assets in the event of separation, the hope being that it will prevent any unnecessary legal battles and significant cost.”
Our family lawyers have significant experience of drafting prenuptial agreements and can advise you as to whether a prenuptial agreement is appropriate in your case and how one should be drafted to try and provide you with some control. Without one, how assets will be divided following separation could be totally in the hands of the court.
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