The importance of prenuptial agreements

In England and Wales, prenuptial agreements (often referred to as prenup) are not legally binding documents however the document will demonstrate to the court what the parties intend if their marriage falls apart and therefore, they can be highly persuasive documents if a disagreement with regards to the division of assets arises when parties separate.

It is very important to remember that prenuptial agreements are legal documents that will be considered by the Courts when prepared correctly. In deciding whether to uphold an agreement the Court will look at the prenuptial agreement in the context in which it was made.

At the time the prenuptial agreement is made the Court will want to ensure the following:

• That each couple understood the financial resources, income and liabilities involved. This requires each of the spouses to disclose to the other what they own and what their assets are at the time that the prenuptial agreement was drafted.
• Neither of the parties must be placed under undue pressure to enter into the agreement. The agreement be prepared in good time before the marriage and each party must have enough time to consider it.
• Each of the spouses should take independent legal advice.

There is a misconception that prenups are only for the rich and famous however in actual fact anyone can get a prenup and there are a number of reasons why you may consider signing one before marrying.

There is a disparity of wealth between you and your partner

This is often one of the most common reasons for getting a prenup.  The wealthier spouse would be disproportionately affected by a divorce in which assets were split equally and therefore a prenuptial agreement allows that spouse to safeguard their assets that may have been building up for years or decades prior to the marriage.

There is a business which needs to be protected

If one party has a business, then this will count as a matrimonial asset and the business could be affected when parties divorce.   For the sake of the business owners and the future of any employees or individual’s dependent on the business, a prenuptial agreement that places the business outside of the pot of shared marriage assets is worth considering.

There is inheritance to protect

As well as protecting an inheritance in the future, prenuptial agreements can also safeguard assets and money already inherited. People marry or remarry at an older age and perhaps after already having children. In this case, they may want to protect the wealth to provide for those children.  In a divorce, prenuptial agreements can prevent inheritance from being shared equally.

Possibility of a divorce in another jurisdiction

If you are marrying someone who lives abroad or who has connections to another country, then there are occasions in which the laws applicable in your spouse’s home country may adversely affect you.  You can avoid falling foul of sharing assets according to the law in another jurisdiction with a prenuptial agreement.

The above are just some of the reasons why you may want to consider a prenuptial agreement in your case.

At Berkson Family Law our divorce solicitors Liverpool have experience of advising and assisting clients with prenuptial agreements.  If you require any assistance please contact us on 0151 236 1234, request a call back at your convenience or email us your enquiry.