Prenuptial (premarital) and postnuptial (postmarital) agreements are becoming more and more popular over recent years and are not just for the super wealthy!
Once a couple enter into a marriage, all assets owned either jointly or solely become ‘matrimonial assets’ and are added to a joint pot unless specifically protected.
What is a pre-nuptial agreement?
The main purpose of prenuptial agreement is to limit any potential claims on the assets of one or both of the parties and are agreements entered into by a couple prior to marriage. They can provide a sense of security and certainty by protecting any pre-marital assets in the unfortunate event that a marriage should break down. The prenuptial agreement sets out how these assets will be divided at that point.
The prenuptial agreement can include and set out what rights each of them has in relation to property, liabilities, income and any other assets purchased together or acquired individually and which they have each brought into the relationship. The prenuptial agreement should also state what will happen to these assets in the event that the marriage breaks down. The prenuptial agreement may also include guidance as to how the mortgage and other outgoings on the family home will be paid.
The prenuptial agreement can also state how the couple wish to divide assets that they have acquired during the relationship.
In the event of the marriage breakdown, this prenuptial agreement will clearly set out how the parties intend to deal with their financial issues, which can remove stress and the potential for any acrimony.
If you are already married, you can enter into a postnuptial agreement.
What is the difference between a Pre-Nuptial and a Post-Nuptial Agreement?
It is exactly what you would expect from the name. A prenuptial agreement is a contract entered into by a couple prior to their marriage to each other. A postnuptial agreement is a contract entered into by that couple after the marriage has taken place. A postnuptial agreement can cover exactly the same issues covered by a prenuptial agreement.
Why enter into a prenuptial or postnuptial agreement?
Prenuptial and postnuptial agreements are particularly beneficial when one or both parties enter the relationship with significant financial assets or children from previous marriages. It is a way for them to set out and protect these assets and the interests of the children going forward.
One or both parties may have been married before and received a financial settlement through divorce proceedings and want to protect themselves in the event of a second marriage breakdown. If they are a widow or widower they want to protect assets received on the death of their previous spouse. There may be a family business owned by one of the parties or a large disparity in the couples’ assets and they want to regulate what will happen to these if the marriage breaks down.
What can a prenuptial agreement protect?
You can set out anything with a value within your agreement, below a just a few things that you may wish to consider.
- The family home
- Family trusts
- Other properties
Will a prenuptial or postnuptial agreement be legally binding?
Whilst the contents of the agreement are not strictly legally binding, it is a contract entered into between the parties and will certainly be an important consideration by the courts during any financial proceedings within divorce. The court will give significant weight to the document as long as the agreement is entered into correctly.
When should I sign a prenuptial agreement?
If you are considering entering into a prenuptial agreement, this should be considered in good time prior to the marriage to enable you both to receive independent legal advice upon the document that you are signing. Prenuptial agreements should be signed at least 21 days before a wedding because the closer you get to the wedding day, the greater the pressure not to pull out. Full financial disclosure should also be entered into prior to the agreement being prepared. You should also consider adding in a review timescale to consider circumstances that may arise such as children.
Where do I get advice?
If you are considering entering into a marriage and wish further advice in relation to a prenuptial agreement or are already married and want advice in relation to postnuptial agreement, please contact one of our family team at Ann McCabe Solicitors for a free initial telephone consultation.
Phone our office in Newcastle under Lyme for free initial advice on 01782 627589
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