A prenuptial agreement is an agreement made between two people before they get married. It usually relates to how finances will be shared out in the event of a divorce or separation. In this easy-to-understand guide, we’ll explain prenuptial agreements in the U.K.
If your marriage does fail, prenuptial agreements are used to state how the marital and non-marital assets should be divided. This may save time and effort during the divorce proceedings, and most importantly save money on legal fees.
Are prenuptial agreements legally binding?
Prenuptial agreements are not currently legally binding in the UK. But courts are likely to consider any prenuptial agreements when considering a case. For instance, a prenuptial agreement can provide a family with a clear-cut layout of how assets should be divided.
With divorces that need to be settled in court, the status of prenuptial agreements is less clear. In summary, courts give “effect” to prenuptial agreements that are freely entered into by both parties, so long as in the circumstances, it would be fair to hold both parties to their agreement.
This PDF by Parliament UK is worth a read if you have any concerns or queries about prenuptial agreements.
Three stages of prenuptial ‘fairness’
Here at KMJ, we are experts when it comes to writing prenuptial agreements. The following three rules must be taken into account when preparing a prenuptial agreement:
1. Prenuptial agreements must be entered into freely
There should be no signs of duress, fraud, misrepresentation, or any signs of exploitation or gaining an unfair advantage. If there is evidence of any of the above instances, then it’s unlikely that a prenuptial agreement will be upheld. We advise clients to begin discussions on the agreement many months before the actual wedding as they should be finalised at least 1 month before the wedding date.
2. The parties must have a full appreciation of the implications of the agreement
This rule prevents one party from gaining an unfair advantage.
3. It must not be unfair to hold the parties to their agreement in the circumstances prevailing
The concept of fairness has caused a lot of debate. How much should prenups provide the financially weaker party to avoid being unfair? The court has discretion in financial proceedings. At a minimum, the courts will seek to protect both parties’ needs (especially the financially weaker party). The needs of any dependents, including children, is also taken into account. It’s important for the agreement to meet this requirement to stand a chance of being upheld.
Prenuptial agreements have been enforced in the UK
In October 2010, the Supreme Court upheld a landmark prenuptial agreement. Judges found in favour of a German heiress and her £106 million fortune. Her husband, an investment banker, had agreed that neither party should benefit financially from a divorce.
The prenuptial agreement was upheld despite the investment banker, Nicolas Granatino, claiming that he had had no legal advice nor had he had the prenuptial agreement translated from German. The case set a significant legal precedent in the U.K.
Are you about to get married and want to put a prenuptial agreement in place? KMJ Solicitors are a team of high-quality London divorce lawyers, specialising in all aspects of family law, including prenuptial agreements. Get in touch today and we’ll talk you through the entire process and answer any questions you have including the cost so you can decide, having had the benefit of this advice, whether a prenuptial agreement would be appropriate for you.