It has to be pointed out that currently Pre-nuptial Agreements are not strictly enforceable. However the agreement having set out what were the parties intentions, may be of considerable persuasive value in the event of court proceedings, if only due to the evidence which they provide. Indeed the Courts have been prepared on occasion to accept a division of assets on the basis of such agreements where the marriage has not been lengthy. Their value at present therefore is likely to be greatest in the early years of a marriage. Moreover there have been indications that the government may introduce changes in the law to make Pre-nuptial Agreements fully enforceable, at least until the parties circumstances alter significantly or until there are children. Additionally there is the possibility in the future of greater judicial acceptance of the agreements and even perhaps of European legislation.
A typical Pre-nuptial Agreement would state that in the event of divorce each party will retain the assets they brought to the marriage and provide for the distribution of assets acquired by either party during the marriage. The way in which assets are to be dealt with in the event of a death should also be covered.
To create a satisfactory Pre-nuptial Agreement, there must be complete honesty between the parties and full disclosure of each other's financial position (as to both assets and liabilities). Both parties must have separate legal representation in respect of the agreement. Also the agreements should ideally be negotiated or entered into comfortably in advance of the marriage and not rushed into at the last moment.
Pre-nuptial Agreements are sometimes criticised as being an acceptance that there may be divorce. But this is the wrong way to look at the matter. It is more likely that the agreement, and the fact that the couple have been sufficiently mature to consider in advance the question of assets if there were to be a separation, will provide additional security to the relationship. In Victorian times, it was commonplace for there to be a pre-marriage settlement. It was the then equivalent of a Pre-nuptial Agreement, and significantly marriages were longer lasting at that time.
Pre-nuptial Agreements are growing in popularity, and despite the doubts as to the extent to which they may be enforceable at present, the best advice must be that it is much safer to have one than not to do so. This is particularly the case, for example in the following circumstances:-
- If you have any substantial or particular assets which you wish to protect: and especially if there is any disparity in value between your assets and those of your prospective partner.
- If there are, or are likely to be children (either from the present or perhaps a previous relationship) who need to be protected and for whom you wish to preserve your assets.
- If you wish to agree the way your assets are to be dealt with in the event of your death (to try and limit the possibility of claims against your estate by your spouse).
For further information and advice and to ask us to deal with a Pre-nuptial Agreement please telephone us on 01684-292341.
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