Prenuptial agreements, commonly known as prenups, are gaining popularity in the UK.
To shed light on this topic, we spoke to Lucy Hart, Solicitor and Director at Sinclair Law Solicitors. Lucy explains the reasons why couples should consider a prenuptial agreement, debunking the misconception that they are only for the rich and famous.
“Prenuptial agreements are available to any couple, regardless of their level of wealth and income, when entering into a marriage or civil partnership.”
For those unfamiliar with prenuptial agreements, Lucy provides a simple explanation. “A prenup is an agreement drafted by a couple before marriage or entering into a civil partnership. It outlines the ownership of assets and how they will be divided in the event of a separation. Both individuals must seek independent legal advice before creating the prenup.”
She clarifies that a prenup goes beyond listing the ownership of basic items and can encompass various assets including property, business assets, savings, debts, income, inheritance, stocks, shares, bonds, and pensions.
Consequences of divorce without a prenup
“In a marriage, assets owned before a marriage often become ‘matrimonial’ and are therefore treated as jointly owned. Without a prenup, these assets are often divided equally during a divorce, which can create conflict if one party feels entitled to more due to pre-existing wealth, a successful business or gifts from family members.”
The purpose of a prenup, Lucy explains, is to provide financial protection and ensure assets are safeguarded from being shared. She adds, “A prenup is established before marriage, allowing for a calmer and more rational decision-making process compared to the emotional turmoil of divorce proceedings.”
When is the best time to set up a prenup?
Regarding the optimal timing for considering a prenup, Lucy dispels the notion that it is exclusively for high-net-worth individuals. “Any couple can benefit from a prenup, regardless of the financial value of their assets. It is particularly relevant when one partner possesses more assets, such as property, businesses, or investments, as it can prevent them from facing significant losses during a divorce. It is also important for anyone considering a prenup that they seek legal advice early on, and don’t leave it until a few weeks before the intended marriage.”
She also notes situations where one partner expects a substantial inheritance or has children from a previous relationship. “In these cases, a prenup can protect the future inheritance or earmark specific assets for the children, avoiding the feeling of unfairness if ‘their’ money is pooled with shared assets.”
There are many reasons why people consider prenups
These include complex property division, existing debts that should remain with one party, or the desire to simplify divorce proceedings particularly in second marriages.
The legal status of prenuptial agreements
Lucy clarifies that while they are legal documents, they are not automatically enforceable by UK courts. However, she mentions key criteria for a court to consider implementing a prenup: both parties must have signed it freely without any undue pressure, had full disclosure of each other’s financial position, sought independent legal advice, and the agreement must be fair and not cause financial hardship or harm to any children involved.
While acknowledging the potential disadvantages of prenups, such as potential court rejection, Lucy highlights the importance of freely agreed upon prenups with legal guidance, which greatly increases their chances of acceptance.
Finally, Lucy addresses the possibility of creating a similar agreement during marriage or civil partnership, known as a postnuptial agreement or postnup. Although postnups are again not 100% legally binding, courts will consider them when dividing assets under the same conditions as prenups.
For couples seeking assistance with prenups or wanting more information about the process, we recommend contacting Sinclair Law Solicitors.
The team at Sinclair Law offers a commitment to flexibility, approachability, plain-speaking, and tailoring each case to individual needs.
For a free 30-minute consultation on any aspect of family law or wills and probate, speak to a member of the Sinclair Law team today.
Find: Hawthorn House, 14 Manchester Road, Wilmslow, Cheshire, SK9 1BG OR 2a Woodford Road, Bramhall Stockport, Cheshire, SK7 1JJ
Call: 01625 526 222
Email: info@sinclairlaw.co.uk
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Website: https://www.sinclairlaw.co.uk/
