Whilst no-one wants to plan for the potential end of a relationship, the reality is that sometimes marriages do break down and, just like taking out health insurance, it is prudent to ensure financial security for both partners should this eventuality occur.

If it does come to it, divorce can be unpredictable at the best of times, with acrimonious litigation always a risk, but by having a nuptial agreement in place, less is left to chance.

Nuptial agreements are often associated with only the super wealthy, but they are becoming increasingly popular with new research revealing that one in five UK weddings involve prenups and that they neither increase nor reduce the risk of divorce.

Attitudes are clearly shifting, and couples are increasingly realising the benefits that these agreements can offer in terms of clarity and security, and in making divorce proceedings as civil as possible should the relationship break down. According to a recent survey, Britons are more likely to see pre-nuptial agreements as a good idea (42 per cent) than a bad one (13 per cent).

So, what are they, and why should they be seen as important rather than unromantic?

‘Nuptial agreements’ refer to both pre-nuptial and post-nuptial agreements and their civil partnership counterparts: pre- and post-registration, or pre-and post-civil partnership agreements.

A pre-nuptial agreement is made between two individuals before their marriage has taken place. The agreement usually sets out how the couple wishes their assets to be divided if they later separate or divorce, or even how finances will be arranged during the marriage. An alternative, or addition, to a pre-nuptial is a post-nuptial agreement. This document works in the same way but can be entered into at any point after the marriage.

Whilst nuptial agreements do not have a statutory footing in England and Wales and will always be subject to the court’s discretionary exercise under section 25 of the Matrimonial Causes Act – in general, judges in the UK give prenuptial agreements significant weight in proceedings and will largely seek to uphold them, providing that they were created and signed with the correct considerations and precautions.

Couples should expect to be held to the terms of their nuptial agreement if they meet four key requirements:

  1. Its terms must be fair (viewed against the circumstances at the time of divorce).
  2. It must have been entered into without duress – and in the case of a pre-nuptial, signed at least 28 days before marriage.
  3. Both parties must have fully understood the terms, with both having obtained independent legal advice (or had the opportunity to).
  4. Full financial disclosure must have been provided.

In circumstances where a couple moves to England having signed a nuptial agreement in another country, they ought to seek advice about whether that agreement would be recognised in England and, if not, enter into a fresh agreement here.

What do these agreements include?

Commonly, a nuptial agreement sets out which party owns or will own certain assets in the case of a future breakdown of the marriage.

The agreement usually covers ‘matrimonial’ or ‘joint’ property, defined as assets acquired during the marriage and assets held in joint names, such as the matrimonial home and joint bank accounts.

It will also likely cover ‘non-matrimonial’ or ‘separate’ property, such as:

  • Assets owned before the marriage.
  • Inherited assets.
  • Gifts received by one party during the marriage.

Nuptial agreements may also deal with income, such as treatment of earnings and future earnings, and interests under trusts and financial provisions for existing children, but do not usually attempt to deal with this for any future children.

Why are nuptial agreements important?

It is a common misconception that nuptial agreements are inconsistent with the idea of marriage and sharing a life together. In reality, they are created with a common intention and give couples the freedom to decide their potential financial future, rather than leaving that power to a judge in the family courts.

The objectives of pre and post-nuptial agreements can be broadly summarised as providing:

  • Clarification of how the parties will conduct their financial affairs during the marriage, enabling the couple to have transparency at the start of the marriage.
  • Certainty for couples who wish to formally agree how their assets should be divided if they later separate or divorce.
  • Protection of assets (such as inherited wealth or pre-marital property) from a later financial claim.

All of which limits the risk of uncertain, emotionally draining and costly court proceedings in the event of a future breakdown of the marriage. Moreover, Any costs incurred in the creation of such an agreement are likely to be far less than potential litigation costs involved in dividing up matrimonial assets upon separation.

A nuptial agreement can be a complicated and sensitive process, requiring in-depth dialogue and cooperation, therefore mediation is a recommended first step. Whilst the prospect of discussing a nuptial agreement with your partner may seem daunting, it can form part of an open and honest conversation about your future together.

If you and your partner are looking to draw up a pre or post-nuptial agreement, you should seek legal advice to make sure any document you both sign is suitable and achieves your aims. Contact our Family Law team who will be more than happy to discuss your matter further.

Our goal at RHL Solicitors is to help make your life easier when it comes to legal support, while providing you with an exceptionally high standard of care.

We don’t just try to reach a settlement for you; we help to resolve legal disputes and achieve the very best outcome by tailoring our advice to your own individual needs.

RHL Solicitors will have no delays or waiting times in advising you on your situation and will be quick to get you the support and care you deserve.