Statistics show that Valentine’s Day is one of the most popular days of the year for marriage proposals. However, for most newly engaged couples one of the least likely topics to discuss over a romantic Valentine’s Day dinner might be the prospect of entering into a prenuptial agreement.
Many couples are likely to think that even considering a prenuptial agreement means that the romance is dead before it has even started. However, for others, prenuptial agreements can provide reassurance in knowing things can go wrong, and may even persuade them to commit to a relationship where there could otherwise be uncertainty.
This is especially true for those who have previously suffered a relationship breakdown and now seek the peace of mind that a prenuptial agreement can offer. Similarly, a person with children may be concerned about the risks involved in entering a second marriage. In this instance, a prenuptial agreement can reassure them that their assets will remain available for their children and grandchildren in the future.
Whilst prenuptial agreements are not nearly as exciting to think about as the hustle and bustle of wedding preparations or romantic honeymoon destinations, they can help you avoid financial issues later in life. They are akin to an insurance policy that you hope you will never need to have to rely upon.
The truth is, sadly that many marriages do end in divorce and it is often at this difficult time in the relationship that the couple realises the stark truth that their marriage is also a sort of business relationship. The dual nature and purpose of marriage has led to the increased acknowledgement that a prenuptial agreement can be useful to protect each spouse’s financial interests.
Simply put, a prenuptial agreement is a contract that a couple signs before getting married to confirm how their assets will be shared between them in the event of a divorce. The prenuptial agreement will record what the assets are at the date of the agreement, who owns them and what will happen to them and it should also deal with the division of any future assets the parties acquire over the course of their marriage. It provides for the needs of the couple and any children in the event the couple decide to permanently separate.
Whilst they are not automatically binding in England and Wales they are becoming more popular and there is more of an awareness surrounding them.
When may a prenuptial agreement be beneficial?
- One of you has been married before.
- One or both of you have children to provide for from a previous relationship.
- One of you has more wealth than the other and/or there is a disparity in your income positions.
- One of you has more debt than the other.
- One or both of you are small business owners or entrepreneurs.
Whilst these are just some examples it is important to remember that anyone can have a prenuptial agreement, regardless of their circumstances.
What are the advantages of prenuptial agreements?
- Prenuptial agreements do encourage a couple to discuss their finances from the outset and can help resolve financial issues before the marriage has started. After all, communication is key in all relationships.
- Prenuptial agreements can offer some security and protection of family assets or property acquired before the marriage.
- They can help provide financial security if there are children from previous relationships or marriages.
- They can also save time and costs. Having a prenuptial agreement which is fair will help save the couple the tension, cost and delay of financial settlement proceedings on a divorce.
Whilst prenuptial agreements are commonplace in mainland Europe they are not automatically binding in England and Wales. However, they are becoming more popular and there is more of an awareness surrounding them. The family court is more likely to place considerable weight on them in the event of a divorce if their outcome is fair and reasonable. Therefore, it is important to provide full details of your assets, seek independent legal advice as to what would be reasonable and include a review clause in the agreement to reflect major life events such as a child being born or just the passage of time.
Last, but by no means least, ensure that the prenuptial agreement is signed by you both well ahead of the wedding so you can then get swept up in the romance of the Big Day!