Prenuptial agreements, more commonly referred to as prenups, are often still perceived as unromantic, overly legalistic and something reserved for the ultra-wealthy.
However, the reality can be very different.
More couples are choosing to put a prenup in place before marrying, not because they expect things to go wrong, but because they want clarity, certainty and control should their marriage end in divorce. Statistically, it’s projected that 42% of marriages will end in divorce. Therefore, it makes financial sense to at least consider a prenup before embarking on marriage.
In England and Wales, the family courts have wide discretion when it comes to determining financial settlements on divorce. That means outcomes can vary significantly from case to case. A prenuptial agreement allows couples to step back from that uncertainty and agree, in advance, how finances should be dealt with if their relationship breaks down.
Far from being about planning for failure, prenups are about making informed decisions at a time when both parties are not influenced by raw emotions following what could be an acrimonious split.
Let’s explore prenups in more detail, examining who might benefit from them, how to create agreements that have the best chance of standing up in the courts whilst also overcoming any unhelpful misconceptions.
Who should consider a prenuptial agreement?
Contrary to what you might think, prenups aren’t just for high-net-worth individuals. In practice, they’re relevant in a much broader range of situations.
If you’re considering whether a prenup might be right for you, consider the following: If there’s any imbalance between you and your partner’s financial positions, a prenup might well be appropriate.
That imbalance might be a result of:
- One party bringing significantly greater wealth into the marriage
- Ownership of a business or shares in a company
- Expected future inheritance
- A second marriage, particularly where there are children from a previous relationship
- Individuals who have already been through a difficult divorce and want greater certainty next time.
For business owners in particular, a prenup can act as a form of protection, helping to ringfence business assets and reduce the risk of disruption to the business in the event of a divorce.
Equally, for many couples, it’s about autonomy. Rather than leaving decisions to a court, a prenup allows you to agree outcomes between yourselves, in a clear-headed and constructive way.
Are prenups legally binding in the UK?
This is where there’s often confusion.
Prenuptial agreements are not automatically legally binding in England and Wales. However, since the landmark case of Radmacher v Granatino (2010), the courts have made it clear that they will give significant weight to a properly prepared prenup.
In practice, that means a court is likely to uphold a prenuptial agreement if:
- Both parties entered into it freely, without pressure
- Both received independent legal advice
- There was full and frank financial disclosure
- The agreement is fair and meets both parties’ needs, particularly housing and income needs.
Put simply, if you sign a prenup, you should do so on the basis that you’re likely to be held to it.
Common misconceptions about prenups
A big obstacle for many couples is how prenups are perceived.
They’re often viewed as unromantic or coming from a place of distrust. After all, who wants to think about the prospect of a relationship failing when planning for a wedding?
This is in stark contrast with the rest of Europe. On the continent, many European jurisdictions treat them as a standard part of financial planning when marrying. However, there has been a noticeable change in the UK in recent years and they’re becoming more common place.
Another misconception is that prenups are straightforward, off-the-shelf documents. They’re not. Each agreement needs to be tailored to you and your partner’s specific circumstances, both now and in the future.
It’s also important to understand what a prenup can’t do. For example, you can’t include terms that are punitive or against public policy, such as financial penalties linked to behaviour (like adultery). The focus must always be on fairness and meeting needs.
What makes a strong prenup?
A well-prepared prenuptial agreement is about far more than simply setting out who gets what.
There are several key elements that make a prenup more likely to be upheld:
Independent legal advice
Both you and your partner must have you own solicitor and thus separate legal advice to each other. This ensures that both of you fully understand the implications of the agreement; both the pros and the cons.
Full financial disclosure
Both of you need a clear and accurate picture of the other’s financial position. Without this, the agreement is vulnerable to challenge.
Fairness and needs
A prenup cannot leave one of you without reasonable provision, particularly in relation to housing and income. Agreements that fail to meet needs when there are the resources available to do so are unlikely to stand.
Planning for the future
A good prenup will consider how circumstances might change. That includes the possibility of children, changes in income, or the length of the relationship.
Practical detail
It’s not enough to say that an asset will be shared. The agreement should set out how that would work in practice. For example, amounts, percentages, timeframes for selling a property and / or provision for either you or your partner to buy out the other.
Jurisdiction considerations
If there’s any possibility of living abroad, it’s important to consider how the agreement will interact with other legal systems. In some cases, a separate agreement may be needed in another country.
Common pitfalls to avoid
One of the most common issues is timing.
Approaching a solicitor a week before the wedding is setting your prenup up for failure. Agreements signed too close to the wedding date risk being challenged on the basis of pressure or lack of proper consideration.
As a general rule, we recommend that a prenup be finalised / signed off at least 28 days before the wedding. That’s likely to mean instructing a solicitor several months before the wedding date.
Another pitfall is trying to push the agreement too far in one party’s favour. If an agreement is fundamentally unfair, it’s far more likely to be set aside by the court.
Ultimately, a prenup works best when it is approached collaboratively, with both parties understanding that it’s there to provide clarity rather than advantage.
A sensible part of financial planning
Divorce rates remain significant, and while no one enters into a marriage expecting it to end, the reality is that many do.
A prenuptial agreement can be seen in the same way as insurance. You hope you never need it, but it’s there to provide protection and certainty if you do.
Handled properly, it can also reduce the likelihood of dispute, cost and stress further down the line.
How we can help
At Gorvins Solicitors, we work with individuals, families and business owners to put prenuptial agreements in place that are clear, robust and tailored to their circumstances.
If you’re considering a prenup, or you’ve been asked to enter into one, our family law team can guide you through the process and ensure your interests are protected.
Get in touch with our team to start the conversation. Call us on 0161 930 5151, email familyteam@gorvins.com, or fill in the online form.