It is increasingly common for those intending to marry or enter into a civil partnership to make provision for what should happen to their assets in the event of a separation and divorce or dissolution. This is particularly so where people enter into second marriages or civil partnerships, and want to protect pre-acquired assets or wish to provide for children from a previous relationship.
A Pre-nuptial Agreement is a formal written agreement entered into by partners before they marry or enter into a civil partnership. The Agreement sets out how they own their assets, and how their property and financial assets should be divided in the event of divorce, separation or death.
Those who have already married can also enter into such Agreements, although they would be called ‘Post-Nuptial’ or ‘Post-Marriage’ Agreements.
Parties would be advised to consider a Nuptial Agreement in a number of circumstances, including but not limited to:
- Where there is a substantial difference between the financial position of the parties
- Where one or both have been married before
- Where one’s family has contributed to the capital
- Where one has a previous family for whom capital needs to be retained
- Where one has assets they want to protect
- Where the parties want a method to resolve the finances in the event of a separation
Nuptial Agreements give an agreed structure for resolving finances and may prevent the need for court involvement.
Enforcing Nuptial Agreements
Nuptial Agreements are not automatically enforceable in England and Wales at the moment. However, recent decisions made by the Court make clear that partners, entering into Nuptial Agreement are likely to find their Agreement is upheld, or at the very least, influential upon any financial settlement provided certain criteria are met:
- Both parties have had legal advice from separate solicitors before signing the Agreement
- Both parties have provided full detail of their own financial circumstances, which includes financial documents as evidence.
- The Agreement is financially fair in the circumstances to both parties should they divorce/separate, or on death. Crucially, the Court will look to see that the needs of the parties and any children are met.
- The Agreement is signed in good time before the wedding or civil partnership
Before obtaining either a Nuptial Agreement, it is a good idea to discuss the matter in depth with your spouse or partner. You will need to agree on how you will divide your assets and debts and take into consideration any future income. A typical Pre-Nuptial and/or Post-Nuptial Agreement would typically include the following details:
- Assets and debts and how they should be dealt with
- Income and expectations of any gifts and / or inheritances
- Any future income or gains including property
- A list of personally and jointly owned belongings
- What will be covered in your Will in the event of your death?
- How much maintenance will be paid to your ex-partner?
- How any property will be divided this would include second homes etc.
- Insurance including life, medical and disability
Here at Rix & Kay, our Family Team has expertise in advising on and drafting Nuptial Agreement for clients, often dealing with complex financial arrangements.