Pre-Nuptial Agreements are an important Financial Planning consideration ahead of marriage, particularly for older couples with accumulated wealth, business assets or expected inheritances.
In this guest article, Jacky Butt at TWM Solicitors LLP describes how a Pre-Nuptial Agreement can stand the best chance of being upheld.
In a landmark ruling in October 2010, the Supreme Court upheld a Pre-Nuptial Agreement, stating that in the right case such an agreement can have “decisive or compelling weight”.
However, the fact remains that in England, Pre-Nuptial Agreements are still now binding.
This contrasts with many other countries where such agreements, entered into by two adults seeking to protect the wealth they individually bring into the marriage, will be upheld.
In this country, we operate the discretionary system to determine the “fair” division of the matrimonial assets if a marriage breaks down. Judges consider a number of factors when deciding what is fair and the existence of a Pre-Nuptial Agreement is only one of those factors.
If deemed to be unfair, the Pre-Nuptial Agreeement will not be upheld by the Court.
The question is therefore, what can be done to maximise the chances of a Pre-Nuptial Agreement being deemed fair?
-Both parties must have full knowledge of the other’s finances.
-Each party must have taken independent legal advice.
-There must be no undue pressure on either party to sign the agreement.
-The Agreement must be carefully drafted. Consider:
–Only seeking to protect assets owned prior to, or inherited during, the marriage.
–Ensuring sufficient provision to cover the other spouse’s reasonable needs in the context of the available assets.
–Anticipating changes in future circumstances – the birth of children – and factoring in increased provision.
–Increasing the provision the longer the marriage lasts.
–Putting in a regular review clause.
-Conclude the Pre-Nuptial Agreement at least a month before the wedding.
If all of the above is followed, there is a good likelihood that your Pre-Nuptial Agreement will be found to have “decisive or compelling weight” and will be upheld.
You can contact Jacky at jacky.butt@twmsolicitors.com or follow the TWM Family team on Twitter @TWMFamily.
Photo credit: Flickr/auddess
