In 2011 34% of marriages failed where one or both of the couple had been previously married. Couples looking to enter into a further marriage or civil partnership should consider how best to protect assets on divorce and dissolution to avoid conflict at later stages.
Pre-Nuptial Agreements are not necessarily required for all who are entering into marriage or a civil partnership. However, they are suited to those who are entering into second (or further) marriages and who have their own wealth and/or wish to protect assets for their children from an earlier relationship. If, for instance, one party has acquired a property through a previous matrimonial settlement or inheritance, it would be sensible to agree in advance what will happen to that property in the event of a divorce.
A Pre-Nuptial Agreement is not legally binding on matrimonial courts. However, recent case law has strengthened the enforceability of Pre-Nuptial Agreements and the Law Commission has recommended that Pre-Nuptial Agreements should become legally binding, provided certain safeguards are incorporated. One of those safeguards is that the (financial) needs of both spouses must be provided for in the event of the breakdown of the relationship. Couples with substantial assets may also want to protect those assets for the benefit of their respective children.
It is important to realise that remarriage will automatically revoke an existing Will. Therefore it is crucial to make a new Will either shortly before you get married, which is expressed to be in contemplation of that marriage, or as soon as possible after your marriage. If you die without a Will in place the intestacy provisions dictate who will benefit from your estate and in what proportions. These provisions are often undesirable and particularly so in the case of second marriages whereby children from a previous marriage may not inherit as much as you would wish them to.
For couples who have children from previous marriages it is possible to include a form of trust in your Will which would have the effect of balancing the need to provide for your current spouse whilst protecting your children’s inheritance. This is done through providing your spouse with the right to the use and enjoyment of your assets for their lifetime but on their death those assets will pass outright to your children. This example is just one of many ways in which a Will can be an indispensable tool in protecting your assets when entering a second marriage and ensuring that your wealth passes in accordance with your wishes.
"it is important to realise that remarriage will automatically revoke existing Will."
In summary, therefore, it should be said that Pre-Nuptial Agreements are almost as good as legally binding agreements, provided that they are fundamentally fair. However, the existence of such an Agreement is only one of the facts that a court would look at if called upon to decide how to deal with the parties’ finances. Most importantly, the existence of an Agreement must not prejudice the welfare and financial stability of any children, whether from a previous relationship or from the current relationship. In tandem with a Pre-Nuptial Agreement, the parties should each make a Will setting out how they would like their estate dealt with on death.
For further advice on the above topics, please call us on 01483 543210 or alternatively email email@example.com