Nuptial Agreements and Asset Protection

Nuptial Agreements and Asset Protection

Have your loved ones contributed to your property purchase, but you wish to ensure their investment is safeguarded? Or, perhaps you are embarking on marriage later in life, with assets you wish to secure for certain people, such as children from a previous relationship?

These questions are becoming increasingly common, especially in light of the challenges faced by those entering the property market without financial help from others.

The key to protecting your assets within a marriage or civil partnership is to get a Nuptial Agreement.

Demystifying Nuptial Agreements: What exactly are Nuptial Agreements, and how do they function?

These legal documents outline the division of assets and finances in the event of a divorce or dissolution of marriage or civil partnership. They come in two forms:

• Prenuptial Agreements (“Prenup”): Entered into before the marriage or civil partnership.
• Postnuptial Agreements (“Postnup”): Negotiated after the marriage or civil partnership.

Do I need a Nuptial Agreement: Are Nuptial Agreements necessary, and when should you contemplate one?

They serve multiple purposes:

• Asset Protection: Clarifying asset, property, and financial division during divorce or dissolution.
• Clarity and Certainty: Offering clear financial expectations and responsibilities for both parties during and post-marriage or civil partnership.
• Avoiding Legal Battles: Minimising disputes and legal expenses linked with divorce or civil partnership proceedings by pre-defining financial arrangements as far as one can.

Legality of Nuptial Agreements: Are Nuptial agreements legally enforceable?

While not automatically binding in England and Wales, courts may uphold them if they meet specific criteria and are deemed just and fair. Considerations include changes in circumstances since the agreement’s was drawn up, and the needs of any children of the family. Even if not entirely enforceable, they can significantly influence any financial settlements and it is recommended that Nuptial Agreements be reviewed whenever there is a change in circumstances, like the birth of a child or moving home.

For a Nuptial Agreement to be considered valid by a Court, certain criteria must be met:

• Voluntary: Both parties must enter into the agreement without being unduly pressured or influenced to do so.
• Full Financial Disclosure: Full and frank disclosure of each person’s finances is required.
• Independent legal advice: It is advisable for both parties to seek independent legal advice, to fully understand the meaning and implications of the document.
• Fair: The agreement should be fair and realistic, and should take into account present and, as far as one can, the future circumstances of the parties involved.

What assets can I include in a Nuptial Agreement?

UK-based assets can be covered by a Nuptial Agreement drawn up here. The protection of international assets may depend on the laws within the legal jurisdiction in which the asset it based. Collaboration with solicitors in that country is required to ensure that where at all possible, there is cross-border enforceability.

Protection of Inheritances and Gifts:

The terms of a Nuptial Agreement can set out what assets are inheritances or gifts, and how those are to be treated in the event of a divorce and dissolution.

How the law treats Nuptial Agreements has developed over time, and will continue to do so, highlighting their importance. Although not automatically legally binding, they are highly recommended, especially where significant assets are at stake. A well-drafted and fair Nuptial Agreement can provide much peace of mind.

Contact us

If you want to set up a nuptial agreement to help protect your assets, reach out to Janet Raeburn, Head of Family Law at Rix & Kay, via t. 01825 744 482 or e. JanetRaeburn@rixandkay.co.uk.