Prenuptial agreements, or ‘prenups’, are formal agreements drawn up between a couple about to marry. The agreement sets out who will take on the responsibility for the marriage assets, such as finances and property, during the marriage and who these assets will belong to following a divorce.
Civil partnerships can also have a form of a prenuptial agreement in place. This is referred to as a pre-registration agreement, but it works in precisely the same way as a prenup for married couples.
While most people go into a marriage hoping that it will last a lifetime, having a prenuptial agreement is like taking out an insurance policy if something goes wrong and the marriage breaks down.
How can a prenup help me?
The whole idea of taking out a prenuptial agreement can sometimes make the other partner feel like there is some level of mistrust in the relationship, which can cause some issues to necessitate speaking to a family and divorce lawyer. But when you look at a prenup without emotion as simply a practical tool for protecting each marriage partner, they make more sense.
Prenups can help you protect:
- Any assets you want to leave to your children from a previous marriage
- Expected inheritance
- Trust funds set up for your children
- Your assets owned before your marriage
When is a prenup drawn up?
You can have prenuptial agreements drawn up with a family lawyer in the UK before you get married. You and your partner will sit down with your lawyer and agree on how each of the assets you bring to the marriage will be divided in the event of a divorce.
If you are entering into a civil partnership, you can arrange for a pre-registration agreement to be drawn up in the same way in advance of your civil ceremony.
It is sensible not to leave arranging your prenup to close to your wedding. You will both need plenty of time to discuss the finer details and agree on how your assets will be shared in the event of a divorce.
You can also get your lawyer to draw up an agreement and have them put it on hold for you both to sign when you are ready and feel comfortable about entering into the agreement.
What is covered in a prenuptial agreement?
Your prenuptial agreement is not all about how your assets will be divided on divorce. It will also cover financial details such as income, pensions and debts. It goes into a lot of detail with your finances because neither of you will want to experience any financial surprises should your relationship break down.
For example, if one partner is bringing a lot of long-term debt to the marriage, the other partner may not want to be saddled with half of the remaining debt a few years down the line.
Prenuptial agreements are more likely to be drawn up between a couple when one partner has more assets than the other or is expected to inherit or acquire substantially more assets than the other during the marriage.
Additionally, some couples include provisions in their prenuptial agreements to address the potential need for a name change service, especially if they anticipate changing their names after the marriage. This aspect may not directly affect the financial aspects, but it can be an important detail to clarify within the agreement to ensure there are no misunderstandings later on.
These agreements are becoming a lot more popular between couples going into their second marriage or marrying later in life after accumulating substantial assets.
Prenuptial agreements help couples to clarify how their assets will be divided in the event of a divorce. There is no one-size-fits-all approach to drawing up a prenup, and the finer details will be unique to you and your relationship.
These agreements can help protect assets you want to leave to your children. A prenup can also help one partner retain complete control of a business and save you from being liable for your partner’s debts.