A prenuptial agreement (sometimes called an antenuptial or pre-marital agreement) is a written agreement between you and your partner, prepared before your marriage or civil partnership. It clearly sets out who owns what and records how your assets, property, finances, and pensions would be divided if, sadly, your relationship were to end.
At one time, prenuptial agreements were associated with the very wealthy or with high-net-worth individuals, but today they are increasingly common.
One reason for this is that couples tend to marry later than in previous generations, which means each of you may have had more time to build up assets — a home, pension, savings or a business before the marriage.
These are sometimes referred to as non-matrimonial assets, and without an agreement in place, there is no guarantee they will be protected from division on divorce.
There are also now far more second marriages, often with children from earlier relationships. In these circumstances, couples often want to maintain a clear distinction between the assets each person brings to the marriage and to ring-fence certain assets for their children’s future.
A prenuptial agreement provides clarity, certainty and reassurance for both of you.
Who should consider a prenuptial agreement?
You may want to consider a prenuptial agreement if:
- You own property or have savings that you are bringing into the marriage.
- You have children from an earlier relationship and want to protect their inheritance.
- You own or have an interest in a business and want to ring-fence it from any future divorce settlement.
- You or your family own a farm or agricultural land.
- One side of the family is putting money into a property as a gift.
- You are expecting to receive an inheritance or have an existing trust fund.
- You are entering into a second marriage and want to ensure capital is protected, for example, to pass to children from a previous relationship.
- There is an unequal contribution of capital into a property.
- You want to protect your assets from your partner’s debts, or vice versa.
Every couple’s circumstances are different, and our experienced Family Law team can advise you on whether a prenuptial agreement would be appropriate for your situation.
Are prenuptial agreements legally binding?
Currently, in England and Wales, prenuptial agreements are not automatically legally binding.
However, since the landmark Supreme Court decision in Radmacher v Granatino in 2010, the Family Court will give a properly prepared prenuptial agreement decisive weight, provided both parties entered into it freely and with a full understanding of its implications.
For the Court to uphold a prenuptial agreement, there are important steps that need to be followed:
- Both parties must have entered into the agreement voluntarily and without duress or undue pressure.
- Both parties must have had a clear understanding of the terms and their implications.
- There must have been full and honest financial disclosure of all assets, income and liabilities.
- Both parties must have received independent legal advice from their own solicitor.
- The terms of the agreement must be fair and take into account the needs of both parties, as well as the well-established principles of sharing and needs that the Court applies in divorce.
It is also recommended that the agreement is signed well in advance of the wedding — ideally at least 28 days before.
This demonstrates to the Court that both of you had sufficient time to reflect and that neither party felt under pressure to sign because the wedding was approaching.
The Law Commission has recommended that nuptial agreements that meet certain criteria should become legally binding in England and Wales
Whilst this has not yet become law, it reflects the direction the legal system is moving in and underscores why it is so important to ensure your agreement is properly prepared.
What scenarios can a prenuptial agreement cover?
The purpose of a prenuptial agreement is to reflect the intentions of both parties and can be used to acknowledge a wide range of circumstances, such as:
- One side of the family is putting money into a property.
- Unequal contributions of capital into a property.
- A pre-existing family business that you want to ring-fence and protect from any future financial remedy proceedings.
- The existence of a trust fund or the anticipated release of inheritance monies.
- Entering into a second marriage, where you want to ensure capital is protected for children from a previous relationship.
- How you will manage your finances during the marriage, for example, how you will share household costs.
- What would happen to your assets, property and pensions if the relationship were to end.
- Protecting one party’s assets from the other’s debts.
A well-prepared agreement should also be reviewed and updated if your circumstances change, for example, if you have children together or there is a significant change to your financial position.
A prenup should be viewed as a working document that can evolve with you. If circumstances change significantly after the wedding, you may wish to consider a postnuptial agreement to update your arrangements.
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