For the majority of people, when they see the word “prenup”, they believe they relate only to the rich and famous who wish to protect their assets on divorce. However, in recent years, it has become more common for individuals to make enquiries of a Family solicitor in respect of such agreements in order to protect their property, earnings and future inheritances.
What is a pre-nuptial agreement?
A pre-nuptial agreement, referred to as a “prenup” for short, is a written contract created by two people before they enter into marriage. The contract will usually set out how the couple wish for their assets to be divided between them if they later divorce or separate. Some prenups can also provide detail as to how the couple arrange their finances and how such finances will be arranged during their marriage.
What is a post-nuptial agreement?
A post-nuptial agreement is a legal agreement which, differently to prenups, is made by a couple who are already married. The agreement will usually set out how the couple wish for their marital assets to be divided between them if they do later divorce or separate.
Why enter into such an agreement?
For both pre-nuptial and post-nuptial agreements, the reasons individuals may wish to enter into nuptial agreements are as follows.
- Certainty – to provide certainty for couples who want to formally agree within a contract as to how their marital assets are to be divided upon breakdown of their marriage.
- Protection – to protect their financial assets, for example inheritance wealth or property acquired prior to marriage, from later financial claim upon divorce.
- Clarification – to clarify how the couple will conduct their finances during marriage and to provide transparency at the start of the marriage. This may enable the financially weaker party to feel secure financially within the marriage.
- Reduce Costs – to hopefully limit financially costly and emotional court proceedings in the event of marriage breakdown.
Are they enforceable?
In the landmark Supreme Court ruling in 2010, in the case of Katrin Radmacher and Nicolas Granatino’s divorce and financial settlement (Radmacher v Granatino), the prenup entered into by both parties ahead of their marriage was given “decisive weight” when the court was dividing their marital assets on divorce.
Prior to this case, nuptial agreements were, in the most part, viewed as only being “persuasive” by the courts. However, after the ruling in Radmacher v Granatino, whereby the court ruled in favour of Katrin Radmacher, the emphasis on pre-nuptial agreements by the courts is now much greater. This case has established that the legal test regarding prenuptial agreements is that, if the agreement was freely entered into then it will be upheld, unless it is not fair, as long as the people entering into the agreement knew what the implications would be. A spouse can contest a prenup however, there must be legitimate reasons for this to be considered by the court.
How can we help?
Nuptial agreements are not only for the rich and famous; every married couple has assets that are worth protecting. If you are considering creating either a pre-nuptial or post-nuptial agreement, then please call 01244 312 306 to speak with one of our Family Law solicitors.
