Prenups: are they enforceable?

A question we are often asked is whether “prenups” – or pre-nuptial agreements – are enforceable. Recent case law has confirmed the court’s position is that valid pre-nuptial agreements will be upheld if challenged on divorce. That then begs the question: what makes a prenup valid? We explore that topic in this blog.

• Full Financial Disclosure

Honesty is arguably the cornerstone of any healthy relationship, and this principle holds true when drafting a prenup. Both individuals should provide complete and accurate information about their individual financial situations, including their assets, debts, income, and liabilities. A lack of transparency could undermine the validity of the agreement and might mean the prenup will not be upheld.

• Individual and Joint Assets

The law surrounding assets on divorce and what assets will and will not be taken into consideration can be confusing. Assets which you may believe are entirely “yours” may in fact be deemed matrimonial by the court, and therefore available for sharing on divorce. A well drafted prenup, however, can potentially impact this. The prenup should outline which assets are to remain separate and which will be considered joint matrimonial property. Properties, investments, businesses, and any other valuable assets – acquired both pre and post marriage – and what should happen to these in the event of divorce – should all be taken into consideration.

• Spousal Support

The move away from traditional gender roles has undoubtedly impacted the number of spousal maintenance claims. However, a prenup does not prevent provision being made for spousal maintenance in the event of relationship breakdown, rather it allows the parties to define the terms and conditions under which one party might be entitled to financial support in the event of divorce, considering factors like length of the marriage, earning potential, and contributions to the marriage.

• Marital Responsibilities and Lifestyle

A prenup can also provide for how you and your future spouse will share financial responsibilities during the marriage. This could include management of joint accounts, payment of household expenses, and decision making on major financial issues. Discussing expectations regarding lifestyle, such as career changes, relocations, or educational pursuits can also be helpful. Thinking these things through before the marriage may seem to some to be ‘unromantic’, but ultimately ensures both parties have thought through and been advised properly on what the legal position will be in the event of the marriage, and then in the event of divorce.

• Sunset Clauses and Changes over Time

Even with a prenup, the future of yours and your spouse’s future remains uncertain in many ways. Circumstances change. For example, when entering into the agreement, both of you may be in full time employment and earning a similar salary. However, on having children, one partner may give up their job to care for the family. It might be worth trying to envisage how this might impact and then look at provisions in the event one of you becomes a homemaker and as such has a lack of income from employment. Consider including provisions for modifying the prenup in the future to accommodate changes in financial status, family structure, or other significant life events. This can make the agreement more adaptable to the evolving needs of both partners, and more likely to be upheld by a court as valid. Some prenups include what lawyers like to refer to as “sunset clauses,” which stipulate that the prenup will expire after a certain period of time, for example after a certain number of years of marriage. This can provide reassurance that the agreement is not intended to be a permanent fixture, but something which would only be relevant were the marriage to break down in its early years.

• Legal Representation

Legal representation is a non-negotiable – it is imperative that both parties completely and fully understand the terms of the prenup and its consequences in the event of divorce. Both parties should seek independent legal advice, so that a solicitor can advise on the fairness of the prenup’s terms. If the parties have not sought independent legal advice, the terms of the prenup may be deemed invalid by the court, as the spouse who would be disadvantaged by the agreement (and would favour better under the law on divorce) may well seek to argue that, in the absence of independent legal advice, they did not understand the agreement.

Divorce cases always tend to turn on their own facts, but a prenup is likely to be given its intended effect by the court provided both parties acted freely, were represented, and the prenup is fair. That said, prenups can be a difficult topic to broach with a partner. We can help with how to pitch that discussion sensitively and collaboratively, and in such a way that hopefully your relationship will be strengthened rather than weakened during the negotiation and drafting process. It can help to think of a prenup as a kind of insurance policy for marriage. Using that analogy and comparing marriage to, for example, the purchase of an expensive car, is sometimes helpful. You would not dream of buying an expensive car but not getting it insured – even though you do not intend to write it off. Prenups can be viewed in the same way as that car insurance – you hope never to call upon it but it’s there should you ever need it – just in case.

Being honest and open about the legal and related financial implications of marriage, and what might come to pass were the marriage to end, is in our view something which should become more commonplace. Considering a prenup might feel unromantic but when such a high proportion of marriages end in divorce, some would say it is surprising they are not far more routine.

If you would like to discuss further whether a prenup would suit you, we offer an initial appointment for a cost of £195, during which we try to give you an understanding of your legal position and what the future might hold.

If you feel Franklins might be the right firm to help you following the breakdown of your relationship, and you would like to enquire about when your initial appointment could be scheduled, please contact our Family Law team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk