Pre-Nuptial Agreements are becoming more popular and below is some information below about them.
What is a pre-nuptial agreement?
A pre-nuptial agreement, known as a pre-nup for short is an agreement entered into prior to marriage to protect assets against future marital breakdown.
It is possible to enter into a similar agreement post marriage, called a post -nuptial agreement.
Why would I need a pre- nup?
England and Wales is the most generous divorce jurisdiction in the world. Unlike most other European countries we do not have a separation of property regime. This means that the sharing principle applies and potentially all your assets acquired pre and post marriage may be shared with your spouse on divorce.
The old adage is that pre-nuptial agreements and post-nuptial agreements are a waste of time and not worth the paper they are written on. Times are however changing. Decisions of the Higher Courts in England and Wales have taken more and more notice of such agreements providing that they contain legal safeguards.
What do I need to do?
It is the presence of the agreement that is important but rather the manner in which it is entered into. Certain key safeguards are as follows:-
- The agreement needs to be entered into no later than 28 days prior to marriage
- Both of you need to have taken independent legal advice and the documentation needs to be executed by the two of you and two independent solicitors
- The agreement needs to contain provision for review upon the happening of certain events. Common review provisions include the birth or adoption of a child of the family, either one of you becoming permanently incapable of work or the passage of a certain period of time, typically 5 or 10 years.
It is important that you obtain proper legal advice so that you minimise the risk of the agreement being held to be unfair under English Matrimonial Law.
What can I protect?
Pre-nuptial and post-nuptial agreements are most effective when you are seeking to ring fence either property acquired prior to marriage, business assets and inheritance. They are increasingly becoming common place in second marriages where you may wish to leave asset to your children as opposed to everything to a spouse.
Post-nuptial agreements are also becoming more popular as older generations wish to pass on assets as part of tax planning but wish to minimise the risk of the assets being available for division on divorce of adult children for instance.
It is important to seek specialist advice to ensure that you are able to protect what you are seeking to protect in a manner which is likely to be upheld by the Courts. For more information contact us now on firstname.lastname@example.org or call us for a free initial chat on 01423 637272.