In today’s society, pre-nuptial agreements are becoming increasingly popular, especially among high-net-worth individuals. While they have been seen as a tool for the wealthy, pre-nuptial agreements can be useful for anyone entering marriage.
It is no secret that financial disagreements are one of the main causes of divorce, and a pre-nuptial agreement can help to alleviate some of these issues.
In this blog post, we will explore the value of pre-nuptial agreements in the UK and how they can benefit you.
What is a Pre-Nuptial Agreement?
A pre-nuptial agreement, also known as a prenup, is a legal agreement made between two people before they get married. The agreement sets out how the couple’s assets will be divided in the event of a divorce. The purpose of a pre-nuptial agreement is to provide clarity and certainty about the division of assets, and to prevent disputes in the future.
While pre-nuptial agreements are not yet legally binding in the UK, they are increasingly being considered by the courts.
Recent Case Law: How Pre-Nuptial Agreements Are Shaping Divorce Settlements
In a recent case of HD –V- WB 2023 EWFC 2, Justice Peel in the Family Courts heard an appeal on 13th January 2023. The parties in this case were both aged 46 and had excelled in their chosen sporting fields. They started a relationship in 1996, and although there was a brief separation in 2000, the relationship was resumed in 2001. They engaged in 2003 and married in 2014, with three children of the relationship. A pre-nuptial agreement was signed on the date of the marriage.
The case considered whether the pre-nuptial agreement should be adhered to. Under the current law, a pre-nuptial agreement may not be determinative of the outcome of financial remedy proceedings. However, the pre-nuptial agreement, in this instance, has operated as a limiting factor in the assessment of needs. The court still retains a wide discretion to give a fair outcome.
Peel J commented that “had the parties married without a pre-nuptial agreement, I suspect that the husband’s award would have been significantly higher. The decision reflects a proper recognition of the limiting consequences of the pre-nuptial agreement balanced against the other legal criteria.”
Protect Your Assets – The Benefits of Signing a Pre-Nuptial Agreement
Having a pre-nuptial agreement can provide several benefits. Firstly, it can protect assets that you have acquired before the marriage. For example, if you own a property or have a large inheritance, a pre-nuptial agreement can ensure that these assets remain yours in the event of a divorce.
Secondly, a pre-nuptial agreement can help to protect future earnings. If you are entering into a marriage with significant earning potential, a pre-nuptial agreement can ensure that any future earnings are protected.
Thirdly, a pre-nuptial agreement can help to avoid lengthy and costly legal battles in the event of a divorce. Divorce proceedings can be emotionally and financially draining, and a pre-nuptial agreement can help to provide clarity and certainty about the division of assets.
Finally, a pre-nuptial agreement can be particularly useful for business owners. If you own a business, a pre-nuptial agreement can ensure that the business remains yours in the event of a divorce.
What the Experts Think!
When we caught up with our Head of Family Law, Angie Brown, she stated that “in a case where the combined wealth of the couple, exceeds their basic needs, obtaining a PNA has now proven to be extremely significant.”
Angie went on to say “Pre-nuptial Agreement, enables the court to shine a light on the couples’ intentions with regards to the available assets, when considering and using their wide discretion in apportionment.”
Plan for the Unexpected to Secure Your Future
In conclusion, while pre-nuptial agreements may not be legally binding in the UK, they are increasingly being considered by the courts. A pre-nuptial agreement can provide clarity and certainty about the division of assets and can help to avoid lengthy and costly legal battles in the event of a divorce.
While they may not be for everyone, pre-nuptial agreements can be a useful tool for anyone entering marriage, especially those with significant assets or earning potential.
It is important to note that pre-nuptial agreements should be entered into with care and consideration. Both parties should seek independent legal advice before signing the agreement, and the agreement should be fair and reasonable. A pre-nuptial agreement that is seen to be unfair or unreasonable may not be taken into account by the courts.
If you are considering a pre-nuptial agreement, it is important to seek independent legal advice and ensure that the agreement is fair and reasonable.