According to the Marriage Foundation, 20% of marriages now have some form of nuptial agreement, whether that’s a prenuptial agreement (entered into before the wedding or civil partnership) or postnuptial agreement (entered into after the wedding or civil partnership), up from 8% in the 1990s. Despite their growing prevalence, some misconceptions still exist, so let’s address them here.
Myth one: they are binding
Nuptial agreements are not automatically legally binding as family judges in England & Wales have a broad discretion when determining financial claims on divorce. The presence of a nuptial agreement will be one factor which a judge will consider when distributing assets on divorce. However, provided certain formalities are complied with, they will be attributed significant weight making them as good as binding on you and your fiancé.
To ensure that your agreement is as binding as it can be, you should ensure that:
- The agreement is fair to you both and that, on the worst-case scenario, both your needs are met, particularly in relation to housing. Leaving one of you with assets worth millions and the other with nothing is highly likely to be considered unfair and a judge will use their discretion in those circumstances to make a more appropriate division of the assets.
- There is full financial disclosure so that you both understand the consequences and implications of entering into the agreement. This should include details of future assets you anticipate inheriting or receiving by way of a gift in as much detail as possible.
- You both have independent legal advice from separate suitably qualified family solicitors so that you understand the terms of the agreement and its implications. The solicitor will have to sign the agreement to confirm they have given you the requisite advice. The economically weaker party must have legal advice, even if that means the economically stronger party paying for such advice.
- You discuss and negotiate the agreement in advance of the wedding and try to ensure it is signed at least a month before the wedding. A nuptial agreement is an important document and shouldn’t be left until the last minute.
Myth two: they are only for the rich
Nuptial agreements are not only for the rich. Their use does increase with wealth although there are a number of scenarios where a nuptial agreement would be appropriate, for example:
- This isn’t your first marriage, and you are looking to protect any assets relating to your previous relationships or where you want to secure the financial interests of your children from a previous relationship
- You have business interests and want to make sure they remain intact and protected on divorce to ensure their smooth operation going forward
- You are due to inherit in the future and wish to ring fence those assets from those which would be shared on divorce
With most marriages and civil partnerships taking place when people are in their 30s, it is to be expected that people are entering into them having generated more wealth than previously. A nuptial agreement can protect the fruits of your hard work, regardless of the level of wealth.
Myth three: i’ll be able to ‘get out of’ a nuptial agreement later if I’m not happy
Whilst nuptial agreements are not binding, as set out above, you should expect to be held to one that is properly formulated and provides appropriately for the needs of you and your fiancé and any children you have. The courts these days are taking a far less paternalistic approach to agreements which have been entered into which comply with the guidance set out above, and will not necessarily get you out of a bad deal you freely entered into. You should not sign a nuptial agreement unless you are prepared to be held to it.
Myth four: my fiancé said they would not marry me if I didn’t sign the prenuptial agreement
Recent case law has indicated that not wanting to marry without a prenuptial agreement can be a completely justified position to take and, of itself, is not enough to constitute undue pressure. It is pressure, but not undue pressure. You should therefore expect to be bound by the agreement reached in those circumstances. Undue pressure which would affect the validity of such an agreement would be if you were intimidated or threatened into signing the agreement.
Myth five: i’ll be able to keep everything that’s in my name already
As outlined above, the agreement needs to ensure that both your needs are met, particularly in relation to housing but often in relation to maintenance too. If the provision is too low it could be challenged on divorce later, with the ensuing cost and stress of that process. If you keeping all your assets could potentially leave your fiancé with insufficient funds to meet their housing needs then you should consider giving them some of your assets on divorce to enable them to house themselves appropriately and make the agreement less open to challenge.
Myth six: I can write it myself
You can write it yourself or ask Chat GPT to write it for you. However, in order for it to be as binding on you and your fiancé as possible, the formalities described above should be complied with. This means that you should have legal advice on the agreement at a minimum, and our advice is that it is drafted by a solicitor who is an expert in these kinds of agreements. The purpose of the agreement is to protect assets and streamline the divorce process, should your marriage come to an end. The cost is likely to be a small percentage of the overall assets you are looking to ringfence whereas the legal costs on divorce, should you separate without an agreement in place, will likely be many times higher than the cost of the agreement. Pre/postnuptial agreements are an investment in your future, an insurance policy against the worst happening in your relationship and you should consider the cost in that context.
If you would like to discuss your options with one of our specialist family lawyers, please get in touch.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at October 2024.