With the current rate of divorce and dissolution of civil partnerships, and recent well publicised marital conflicts on divorce, it is no surprise that couples looking to enter into marriage or civil partnership are increasingly considering how best to protect assets on divorce and dissolution and avoid conflict at later stages.
Pre-Nuptial Agreements are not necessarily required for all who are entering into marriage or a civil partnership. They are most suited to those who have inherited family wealth and also those who are entering into second (or further) marriages and have their own wealth and/or wish to protect assets for their children from an earlier relationship.
A Pre-Nuptial Agreement is not legally binding on matrimonial courts. The couple cannot waive the right to apply to the court for financial provision, even if there is a Pre-Nuptial Agreement in place. However, the court will give full consideration as to whether the provisions in the Pre-Nuptial Agreement should be upheld.
The Agreement should be entered into freely without coercion and should be fair. Any Agreement which may leave the other person in financial difficulties is unlikely to be upheld. There should be provision for review upon the occurrence of certain circumstances, such as the births of any children, bankruptcy, disability and inability to work etc. However, if the parties’ financial needs are adequately covered in the Agreement, then a further sharing of assets which have been ring-fenced may be avoided.
The Agreement should be negotiated and entered into as far in advance of the wedding as possible, and at least 21 days before the wedding. The couple should provide details of their assets and those they wish to retain on divorce. Both parties should take specialist family law advice on the proposed Agreement and the implications of entering into the Agreement.
It could be said that Pre-Nuptial Agreements are almost as good as legally binding agreements, provided that they are fundamentally fair. However, the Agreement is only one consideration a court would look at. Most importantly, the Agreement must not prejudice the welfare and financial stability of any children.
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