Pre-marital agreements, otherwise known as pre-nuptial agreements or “prenups” are written contracts between two people before marriage (or civil partnership) providing details, should the marriage fail, of how the assets are to be divided.
Pre-marital agreements are a means of protecting pre-marriage assets, and previous family commitments, such as children from a previous marriage. Once you are married, then all your assets become the matrimonial assets. Unless you protect them with a pre-marital agreement, they will be merged together.
A pre-marital agreement sets out each individual's rights in relation to property and assets acquired. A post-nuptial agreement can be made by people who are already married.
Once a couple marry, their possessions, money and property are placed into a single financial pot that under matrimonial law are to be equally divided in a divorce situation.
A “Prenup” can offer a certain amount of protection to both parties in the case of a relationship breakdown.
Individuals who are re-marrying may require a measure of certainty after having experienced a difficult divorce. Perhaps there are children from a previous marriage that need to be financial supported, there also may be a requirement now or in the future by inheritance provisions.
There may be complications of a 50/50 division of assets should the case arise. Business interests may be such that one party may need to ensure control is retained.
One of the couple may have debt that needs consideration that could be dealt with by the incorporation of a “debt clause” in the agreement. On the other hand there may be inheritance that has been received or is expected requiring protection.
Money can be an emotive subject in relationships, particularly when there are differences in attitudes towards spending. Agreements can be used to determine day to day accountability, such as how the mortgage/rent is paid. How bills or debts are paid, whether this will be through a joint bank account.
Personal property such as vehicles or household contents, if paid for jointly, in the event of a relationship split, can be decided on how they are divided. Consideration may be needed to determine what would happen to animals and pets.
It is important to note that pre-marital agreements are not legally enforceable in England and Wales. However when prepared by a qualified solicitor to comply with UK law, they are more likely to be upheld by a court. This is as a result of a landmark decision in the case of Radmacher v. Granatino in October 2010.