My fiancé wants me to sign a prenuptial agreement. Should I agree?
A prenuptial agreement is a contract setting out how assets should be divided if the marriage were to break down. An increasing number of couples are entering into these agreements and they are not just for the very wealthy. The main reason for having a prenuptial agreement in place is to protect property or business assets acquired before the marriage, inherited wealth, savings or to ensure financial provision for children from a previous relationship. Without one, the starting point for a division of assets built up during the marriage is equality and assets acquired before the marriage may be taken into account to meet the housing needs of the parties.
Is it legally binding?
Although prenuptial agreements are not strictly legally binding in the UK, they are increasingly being upheld by the courts provided both parties have had independent legal advice, they each have a clear picture of the others financial position, it is signed at least 21 days before the marriage and is entered into freely. The terms of an agreement must be fair to the financially weaker party and the agreement should be reviewed at regular intervals e.g. if you have children or there are changes in assets or income.
It is important to start the process early. Preparing a prenuptial agreement involves exchanging full financial disclosure and obtaining independent legal advice, which can take time. If it becomes difficult to complete everything before the wedding, which is very common given how much there is to organise, the agreement does not need to be abandoned. It can instead be finalised after the marriage as a post-nuptial agreement (see below), provided the same safeguards are followed. It is far better to ensure the agreement is prepared properly and thoughtfully rather than rushing it simply to satisfy the 21-day recommendation, as an agreement that has been hurried or entered into under pressure is far less likely to be upheld in the future and leaves greater scope for it to be challenged.
What if we are already married?
It is not too late. Many couples only start thinking about protecting assets after the wedding. You may have married young, married quickly, or simply not felt comfortable raising the topic beforehand. In some cases, circumstances change after marriage — perhaps one of you has received an inheritance, started a business, or your financial positions have shifted significantly. A post-nuptial agreement works in a similar way to a prenuptial agreement but is entered into after the marriage has taken place. Like prenuptial agreements, postnuptial agreements are not automatically binding but can carry significant weight with the court if they are properly prepared, fair, and supported by full financial disclosure and independent legal advice.
Will I lose out if I am not the main earner?
It may not be an easy conversation to have with your partner, but use this opportunity to have a serious and open discussion about your finances and try to agree on the terms together. Although prenuptial agreements are generally favourable to the wealthier spouse, it can give you certainty going forward and save a lot of stress and legal costs in the event of a divorce.
The court generally gives significant weight to agreements that have been entered into freely at a time when the relationship is strong and both parties are on good terms. Reaching an agreement in a constructive and cooperative way before difficulties arise is very different from trying to negotiate a financial settlement during a divorce, when emotions may be high and trust has broken down.
You should start the discussions as early as possible and most importantly seek legal advice so the agreement can be tailored to your particular circumstances.