Preparing for marriage is a happy time for the couple and their loved ones. Whilst one doesn’t know what the future might hold, it is an unfortunate statistic that many marriages break down resulting in separation and Divorce.
On Divorce the associated financial settlement can be both unpredictable and expensive. A pre-nuptial agreement can be of considerable benefit to both parties by providing a measure of clarity and certainty.
Whilst Nuptial Agreements and not formally recognised in statute they are likely to be upheld by the court if they meet the required criteria set out by the Supreme Court. This includes:
- The agreement must be freely entered into.
- Both parties must have received independent legal advice.
- Both parties must understand the implications of the agreement.
- The agreement must be fair and both parties’ needs must be met.
- The agreement must be contractually valid.
- There should be full disclosure around financial circumstances.
- It should not prejudice the needs of any children.
- The agreement should ideally have been made at least 28 days before the wedding.
Deciding on whether to enter into a pre-nuptial agreement can be a difficult choice. Many of the agreements drafted are created to protect existing children as well as assets owned prior to the marriage such as a pre-owned property, a business or farming estates that are typically brought to the marriage by one party.
It is also increasingly commonplace for parents (and indeed grandparents) to provide financial assistance to the younger generation in getting a foothold on the property ladder (the so-called ‘bank of mum and dad’) and a properly drafted nuptial agreement can protect family wealth against future claims.
If your circumstances change after marriage, for example, a large inheritance is received by one party, a couple can also enter into a post nuptial agreement. As with the pre-nuptial agreement, the agreement is likely to be upheld in court if the required criteria are met.
Asset protection is a key part of the work that our team undertake for our clients and as is often said “prevention is better than the cure”. We act for clients throughout East Anglia and London, with particular expertise in respect of farming families.
This article is only intended to be a summary and not specific legal advice.
*This article was published in the Winter 2022 Edition of Bury & West Suffolk Magazine.