Q. What is a pre-nuptial or pre-marital agreement?
A: It is a contract signed by a couple before their marriage containing terms about how their finances will be dealt with if they separate or divorce in the future.
Q. How long will it take for my agreement to be effective?
A: The agreement will be effective from the time you and your partner sign it.
Q. Why should we enter into a prenuptial agreement?
A: There are several reasons why one should enter into a prenuptial agreement. Although it does not sound very romantic, it provides peace of mind in case the marriage hits difficulties in the future and you have invested substantial pre-marital wealth and/or inheritance. A fairly negotiated agreement can provide some reassurance to the wealthier spouse as to the extent of the financial impact of a divorce; and at the same time it should give the less wealthy spouse some guarantee of his or her entitlement upon a divorce.
Q. What should I do to have a valid and enforceable pre-marital agreement?
A: The current view is that we cannot guarantee that any Pre-Nuptial Agreement will be completely legally binding if there is a separation or divorce in the future. However, the general view amongst practitioners is that, in order to give the agreement the best chance of being upheld by a Court, the following points need to be borne in mind:
I. It is very important that neither you nor your partner feel pressured into entering into the agreement. Both of you must do it voluntarily and of your own freewill.
II. Both of you need to be separately and independently advised by a solicitor.
III. Both of you must disclose to each other your financial position – to include your assets, liabilities, pensions, income and financial circumstances generally. This disclosure will normally be exhibited to the agreement as a schedule. It is important that this disclosure is full, frank and honest. It does not, however, need to be enormously detailed.
IV. It is important that the agreement is entered into some time before the marriage takes place. Many people suggest at least 6 weeks before the wedding is the minimum.
V. The agreement should be fair. An agreement which is not, is unlikely to be upheld. To be fair, recognition will have to be given to changing the agreement as time goes by and circumstances change. What is a fair decision after a short marriage will not necessarily be fair after a marriage of many years, or if there is a child of the marriage. One option is therefore to specifically state in the Agreement that it will be reviewed on certain future events or, say, every 5 years.
Q. What can be agreed to in a pre-nuptial agreement?
A: Prenuptial Agreements can deal with largely anything the parties want them to, within reason. The main aim is to agree the distribution of property and assets upon their separation, divorce or death. Parties often include terms with respect to:
I. Clarifying their Separate Property – which will never become part of the “matrimonial pot” to be divided between the parties on divorce or separation
II. How any property or assets obtained during the marriage itself will be held;
III. Day-to-day practical matters such as whether a car is jointly owned, or how a joint account would be run for general living expenses;
IV. What happens to property or other assets upon separation, divorce, or death;
V. Whether one party should provide maintenance – for a child and/or for the spouse;
VI. The agreement of making of a will, trust, or other arrangement to carry out the provisions of the agreement;
VII. The choice of law governing the construction of the agreement; and
VIII. Any other matter, including their personal rights and obligations.
Q. Why enter into them if they are not necessarily legally binding?
A: Recent cases indicate that English Judges are increasingly willing to take these agreements into account when deciding the distribution of assets following a divorce.