A prenuptial agreement can provide clarity and certainty by setting out how you and your spouse will share the assets you have if you were to divorce, whilst also protecting certain categories of assets from being distributed between you.
Is a pre-nuptial agreement legally binding?
No. Pre-nuptial agreements are not legally binding. They cannot override the Court’s discretionary powers to deal with assets and income on divorce. A Judge will decide what weight to give pre-nuptial agreement as part of their powers.
Providing you and your spouse enter into an agreement of your own free will, you both understand the implications of the agreement (and you should both take independent legal advice), and the agreement is fair in the prevailing circumstances, it is very likely that an agreement will be upheld. You should therefore enter into any agreement in the mindset that you will be held to this.
What if we have already married and don’t have a pre-nuptial agreement?
No need to worry. It is also possible to enter into a post-nuptial agreement, which is essentially the same as a pre-nuptial agreement except that it is done following the marriage.
What are the advantages and disadvantages of these agreements?
Protection of assets – certain classes of assets can be excluded from being shared on divorce. If you agree that certain assets will be shared, it is also possible to set out how this will be done.
Not legally binding – there is no guarantee an agreement will be upheld by the Court. However, so long as it is properly drafted, and certain safeguards are met then it is likely to be upheld.
Minimising acrimony on divorce – agreeing how your finances will be dealt with in advance means there should be fewer disagreements, particularly important if you will be coparenting in separation.
Changes in circumstances – an agreement cannot predict what will happen throughout the course of your marriage and circumstances can change leading the agreement to become unfair. In order to get around this, a review clause can be included which provides for the agreement to be reviewed every so often, or on a big event such as the birth or adoption of a child.
Certainty and clarity – you both know at the outset how finances will be dealt with in accordance with the agreement.
Difficulties making financial provision for children – it can be difficult to anticipate what financial requirements any children may have in the future. However, this can be mitigated by including a review clause in the agreement.
Flexibility and tailored solutions - these agreements offer couples the opportunity to create customised financial arrangements that suit their unique circumstances and avoid the risk of the Court imposing something upon them that neither of them wants.
Cost and time savings - disputes over financial matters in divorce proceedings can lead to lengthy and costly legal battles. Couples can potentially save significant amounts of time and money by entering into an agreement either before or during the marriage.
As can be seen from the table above, pre and post-nuptial agreements offer numerous benefits for couples. They can be valuable tools for couples seeking to secure their financial future. However, it is essential to consult a qualified family lawyer to ensure the agreement is properly drafted and given the best chance of being upheld.
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