Is there any point having a Pre-Nup?
This is a question which is regularly asked because at the present time Pre-Nuptial Agreements (pre-nups) are not legally binding on the court in England and Wales. It is therefore easy to conclude that there is little point in having one. However, the courts will give effect to a pre-nup that is freely entered into with both parties having full appreciation of its implications.
The purpose of a pre-nup is to protect ('ring fence') certain assets or property to avoid them being included within any financial claims should the marriage breakdown. They are therefore often used to protect, for example, a second property which has been acquired before the marriage. It may also be the case that one or both parties may have children from a previous relationship and they would wish to protect assets for the purpose of inheritance planning.
Whilst the courts can overrule the terms of a pre-nup, they do regularly either take them into account or decide that the parties should be bound by them. To ensure that the court should give effect to a pre-nup there are certain criteria which need to be met.
- Whether the parties intended to be bound by the terms of the agreement. This requires them to have taken independent legal advice to ensure that they fully appreciate the implications of the agreement.
- There needs to be financial disclosure ensuring both parties have sufficient information to be advised and to make an informed decision on whether to enter into the agreement.
- There should be no duress or undue influence. The agreement needs to be signed at least 21 days before the date of the marriage and it is therefore important to plan in advance. No party can be expected to sign a pre nup as they are walking down the aisle!.
- The terms of the pre-nup need to be reasonable and fair so as to provide for both parties basic needs in event of a divorce.
If you require further advice regarding pre-nups or any family matters, please do not hesitate to contact one of our family team. Finally, remember, entering into a pre-nup does not mean you are more likely to get divorced.