Is It Worth Getting A Prenup Agreement?

If you want to protect yourself and/or your assets in the event of a divorce or civil partnership dissolution, then the answer to the above question has to be a resounding yes, it is worth getting a prenup agreement!

This type of agreement is a contractual document entered into before marriage and drafted to set out what will happen to your property, assets and income in the event of a separation or divorce. Prenuptial agreements are becoming increasingly popular and are frequently upheld by the Family Court when making decisions on how assets should be shared or wealth divided on the breakdown of a marriage or civil partnership.

Why should I get a prenup agreement?

You could consider a prenup agreement as being akin to an insurance policy to provide protection in the event of a claim. The prenup agreement is signed with the knowledge that it will provide a firm financial structure, even though it would not be used if the couple remain together.

In general terms, a prenuptial agreement may be used to provide an additional layer of protection to ring-fence pre-existing assets, anticipated assets, income and pensions from prospective claims in the event of a divorce or permanent separation.  It makes sure those identified assets stand alone and remain the property of the party who already owns them, expects to own them through inheritance or gift, or who has generated them either by their own efforts, through family wealth, lottery-type wins or investments.  Generally, the prenup agreement will be used to protect these assets from claims by the other party.

Will a prenup agreement protect my assets?

Since 2010 and the Supreme Court decision in Radmacher v Granatino, prenup agreements have been increasingly persuasive and are frequently adopted under English law even though they are not absolutely binding at this point in time.

Provided the agreement is fair and certain conditions are met then the court is most likely to uphold it when making a financial order between separating parties. This is similar to the law in many other jurisdictions where prenup agreements are fully binding and reflects modern society.

For the prenuptial agreement to have the best chance of success before the Court by reference to the decision in Radmacher, the following are recommended:

If your prenup agreement satisfies these criteria then it is more likely than not to be approved by the Court in the event of a dispute.

Timing

If you are about to propose, considering getting married or entering into a civil partnership then a prenup agreement is certainly the way forward for you and you should act on this as soon as possible.

Even though the Court ultimately retains the discretion to make its own determination, the presence of the prenup agreement will be a very important factor applied by the Judge in the exercise of their discretion

It is best practice for disclosure to be between solicitors and for the prenuptial agreement to be signed following legal advice and at least 28 days before the celebration of the marriage.

However, the absence of one or more of those factors does not automatically mean the agreement would be disregarded. For example, parties will often share disclosure between themselves and one party may choose not to take legal advice, even though the other party has offered to pay any fees associated with it.

Will I be bound if I sign a prenup agreement?

You should never sign a prenup agreement unless you are willing to be bound by the terms of it.  There will be time to negotiate before the deed is executed and you must make sure that you are content with what you sign knowing that you will be bound by those terms once you are married or have entered into a civil partnership.

What happens if I change my mind regarding a prenup agreement?

If you try to withdraw from the terms of the prenup agreement at a later date you may face enforcement of it and costs consequences before the Court.  In this situation, the person relying on it may apply to the Court to fast-track a financial resolution to the case and issue a notice for you to show cause why the prenuptial agreement should not be followed.  This is a serious application.

If the notice to show cause is successful and the prenup is upheld the party hoping to withdraw from it is at risk of having a costs order made against them.

Prenup agreements are an excellent way to protect family assets, pre-acquired, wealth, high-income, and business assets.