When you decide to get married, sorting out a pre-nuptial agreement is unlikely to be top of your list. But an increasing number of couples are getting them. Pre-nuptial agreements aren’t legally binding in England and Wales (although they are in Scotland), but the divorce courts still take what’s written on them into account.
What is a pre-nup?
A pre-nuptial agreement – or pre-nup – is a legal document that will typically set out some terms and conditions about what should happen to money and property if you and your husband get divorced.
- It can’t cover everything. For example, it couldn’t say that your husband or wife (or you) wouldn’t contribute a penny towards the maintenance of your children. That would depend on where they spent the majority of their time after you divorce.
- It could set out what should happen to assets that you owned or built up before you got married (whether it’s a business, a property or shares).
- It could say that an inheritance or gift would be ring-fenced or split during a divorce.
Historically, pre-nuptial agreements have tended to be used by men to ringfence shares, their business or property they own. But with more people getting married for the second or third time – and more women becoming successful businesswomen in their own right – that’s changing.
SAVVY TIP: The idea of a pre-nuptial agreement might be easier to deal with if you think of it as an insurance policy against breaking up. You don’t take out property insurance assuming that your house will be badly damaged, but if it is, you’ll be glad you’ve got it.
Are pre-nups legal?
In England, Wales or Northern Ireland, pre-nups inhabit a legal grey area. They’re normally taken into account by divorce courts, but they’re not legally binding.
SAVVY TIP: A case, brought by a German heiress, Katrin Radmacher that went to the Court of Appeal in 2009 was watched very closely by divorce lawyers. Their pre-nuptial agreement was ruled to be legally binding, but the decision doesn’t set a precedent as a change in the law is needed to make pre-nups legally enforceable.
In Scotland, the situation is slightly different where pre-nups are becoming more common and are generally legally enforceable. It does depend on how the pre-nup was drawn up and whether both of you were told to get independent legal advice before you signed.
How to draw up a pre-nuptial agreement
A judge will not consider a pre-nup if it looks like there’s been any sign of coercion or if you didn’t get legal advice about the implications of signing before you went ahead. Pre-nups can cost anything from a few hundred pounds to over two thousand pounds, depending on how complicated your situation is.
To avoid this make sure that:
- Your pre-nup is drawn up at least 21 days before the wedding. The way the courts see it, the closer to the wedding day the pre-nup is signed, the more likely it is that you were under pressure.
- There is full financial disclosure. This means each of you has to provide a summary of what you own and what you owe.
- Each of you takes your own legal advice. If you don’t do that, you may not understand the disadvantages of signing.
- The pre-nup is not ‘manifestly unfair’. If you’re a millionaire and your husband-to-be is on a low income, you can’t say that you want to keep all your assets while he gets nothing.
SAVVY TIP: One problem with pre-nups is that they date quickly. Signing something when it’s just the two of you is one thing, but you may have other ideas once you’ve had children. Your solicitor should make sure that the pre-nup has a clause saying it should be reviewed after the birth (or adoption) of a child or after 5-10 years of marriage.
SavvyWoman email newsletters: If you found this information useful why not sign up now to receive free fortnightly email newsletters with money saving tips and help? You can sign up at the top of any page on the website and your details won’t be passed to any other company for marketing purposes.