A pre-nuptial agreement is a legal document that sets out how assets should be divided between a couple in the event of the breakdown of their marriage. People may decide to enter into a pre-nuptial agreement for a variety of reasons such as:
- To protect family wealth e.g. in circumstances where one party has inherited significant wealth or assets prior to the marriage.
- To keep one’s own assets e.g. in circumstances where one or both of the parties have been married before and wish to protect their assets for the children of the first marriage.
- Certainty – unfortunately, certainty is hard if not impossible to obtain. The substantive law in section 25 of the Matrimonial Causes Act 1973 which the court considers when making any financial orders, is constantly being developed and the way in which prenuptial agreements are treated is also the subject of interpretation.
For a pre-nuptial agreement to stand a chance of being seen as contractually binding, the Law Commission recommends that it should meet the following criteria:
- There must be full financial disclosure by both parties
- Both parties must have received independent legal advice
- The agreement must have been signed no later than 28 days before the wedding
- The agreement should be in the form of a deed
- The agreement should be signed by both parties with a statement that the parties understand they are contracting out of the court’s jurisdiction
- There should be no fraud or undue influence
- The agreement should make provision for meeting the needs of the parties and the children of the family
Clients should bear in mind that ultimately, in the event of a dispute, the courts have the power to vary agreements in the interests of fairness or meeting need. Whilst they will consider the existence of a pre-nuptial agreement, they will decide what weight should be given to it in the context of all the relevant circumstances of the case.
Refer to our facts sheet that cover further information regarding prenuptial and cohabitation agreements. Read it by clicking here.
Read this blog that discusses a ’10 point guide to prenuptial agreements’, it may be useful. Find it here.
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