What is a Pre-Nup and why should you consider having one?

A pre-nup (short for pre-nuptial agreement)  is a document that can be drawn up prior to marriage to record a couple’s intentions as to what should happen to their assets and income in the unfortunate event that the marriage fails.

Reality is that a high proportion of marriages do fail.  It would therefore be wise to at least have had a discussion prior to the marriage about what would happen to assets and income if the marriage were to fail.  Drawing up a pre-nup is just going that one step further and recording those intentions.  In this way there is no uncertainty and both know what to expect if the marriage fails.

At the present time pre-nups are not legally binding in the UK.  This means that any court asked to consider the division of assets and income at the end of a marriage, is not bound to follow the terms of the pre-nup.  Of course a court is only going to become involved if one or other spouse does not adhere to the previously agreed terms of their pre-nup.  However in the event of a dispute a court must at least consider what was intended i.e. as recorded in the pre-nup and the circumstances in which the pre-nup was made.

A court can, if it chooses, uphold a pre-nup that is freely entered into by both parties with a full appreciation of its implications.  This then avoids the financial and emotional cost of lengthy court proceedings arguing about how assets and income is to be divided.  However if the pre-nup is to have any chance of being upheld by the court there are a couple of “rules” that should be followed when the pre-nup is being prepared.

1. Timing – The Law Commission has indicated that a pre-nup should be concluded 28 days before the marriage.  This is to avoid the suggestion of undue pressure being placed on one or other party.
2. Financial disclosure –The pre-nup should set out each party’s financial positions including their assets, income, pension and liabilities.  Such disclosure allows a transparent consideration of what might be a fair and equitable division of assets having regard to the likely legal entitlements of each spouse at the end of their marriage.
3. Legal advice – Both parties to the pre-nup should be in receipt of independent legal advice before signing so that they both fully understand the implications of the pre-nup.  In particular, and whilst the pre-nup cannot override the jurisdiction of the court, there has to be an understanding of the seriousness of the pre-nup and the fact that it can be considered and possibly upheld by a court at the end of a marriage.

The pre-nup is unlikely to be upheld if the court finds any evidence of mistake, duress, undue influence, misrepresentation or unconscionable conduct. The Law commission further suggests that a pre-nup should  be reviewed every few years as circumstances change and what might be a fair division at one point in the marriage may not be as time moves on. The birth of a child would be a point at which the provisions in the pre-nup should be reviewed.

For more information or guidance on drawing up a pre-nuptial agreement in advance of your marriage, please contact our family team, who will be more than happy to assist on family@franklins-sols.co.uk.