Although prenups are not 100% legally binding in the strictest sense of English law, courts in the UK will generally give prenups significant weight – and they are often followed – if they are drawn up properly and are fair. When considering the fairness of a prenup there are some important points that a Court will consider:
If you want to protect specific assets, such as a business or pension, it is not as simple as both signing a piece of paper to say the business or pension is yours. For the prenup to be fair one of the things you will have to demonstrate is how you will both be provided for if you separate. You can ringfence an asset, but only if you have an alternative way for your spouse to be compensated or they have assets of their own that they can keep and therefore that would be fair. If the prenup meant one spouse would be comfortable, but the other was in financial hardship that might be problematic for the Court and the prenup could be disregarded.
Equally, if there are not sufficient assets to go around without including your business or pension, you need to be aware of that before getting married or becoming civil partnered, so there are no nasty surprises later. However, there are lots of options you can consider including limiting your spouse’s share to a percentage of the value added after you wed so a prenup may still give you some protection.
What if our circumstances change?
If you got married without a prenup or your circumstances have changed, you can prepare a Postnuptial Agreement in its place. These are like prenups but can be put in place after the ceremony. Similar rules apply in that they must be fair, legal advice should be taken and it is important that no one feels any pressure to sign. It is always advisable to review your prenup if you have children as the Court is likely to disregard any provisions within it that could be considered unfair towards children.
It is not only advisable to take legal advice when preparing a prenup, but it is necessary for both people to obtain independent legal advice on the fairness of the agreement if you want it to stand up in an English Court.
Filed Under: Insight