Family solicitor, Alan Stanley, answers some frequently asked questions on prenuptial agreements as part of our Family Law Friday series:

What is a prenuptial agreement and how does it work?

A prenuptial agreement, commonly known as a prenup, is a legal contract that a couple creates before getting married or entering into a civil partnership. This agreement outlines the financial and property rights of each partner in case the marriage ends in divorce or separation. While prenups are not strictly binding in all jurisdictions, including England and Wales, they can significantly influence how courts handle financial matters during divorce proceedings. Here’s a closer look at how prenuptial agreements work:

What are the main reasons couples opt for prenuptial agreements?

Couples have various motivations for considering prenups. Primarily, they use prenups to establish clear financial expectations and protect their individual assets. This is particularly relevant when one partner has significantly more wealth or income than the other. Prenups also play a crucial role when one or both parties bring substantial assets into the marriage, such as inheritances or family trusts. Additionally, prenups are useful in defining what assets will be classified as ‘matrimonial’ or ‘non-matrimonial’, especially when dealing with business assets owned prior to marriage. Couples with children from previous relationships may use prenups to safeguard assets for inheritance purposes. Moreover, if there are international ties or property in different jurisdictions, prenups can provide clarity on the legal implications across borders.

Are prenuptial agreements legally binding?

In England and Wales, prenuptial agreements are not automatically binding in court. However, they can carry significant weight if certain conditions are met. The landmark case of Radmacher v Granatino in 2010 established that courts should uphold a prenup if it was freely entered into by both parties with a full understanding of its implications, unless enforcing it would be unfair. While prenups are not fully enforceable as contracts, courts consider them as one factor among others when making financial orders during divorce proceedings.

How can a couple ensure the validity of a prenuptial agreement?

To increase the likelihood that a prenup will be upheld by the court, both parties must provide full financial disclosure to each other. This means revealing all assets, income, and liabilities. Each party should also seek independent legal advice from separate solicitors to ensure they fully understand the agreement’s consequences. It’s also beneficial to finalize the agreement well in advance of the wedding, allowing time for negotiations, legal advice, and proper consideration. When these steps are followed, and both parties willingly and knowingly agree to the terms, the prenup is more likely to be considered valid and fair by the court.

What can be included in a prenuptial agreement?

Prenuptial agreements are highly customizable to each couple’s unique circumstances. They can cover a range of financial aspects, such as what happens to pre-marital property, the family home, inheritances, joint accounts, business assets, personal belongings, and earned income during the marriage. Prenups may also address how debts will be handled, whether maintenance payments will be made, and how property will be divided in the event of divorce. Child-related matters, like custody and support, are generally not covered by prenups as courts prioritize the best interests of the children.

What are the advantages and disadvantages of prenuptial agreements?

Prenups offer several advantages, such as providing clarity and predictability in the event of divorce, protecting pre-existing assets, and potentially streamlining the divorce process. They can also be especially helpful when there’s a significant disparity in wealth or when there are complex financial arrangements involved. However, there are also downsides. Some argue that prenups can undermine the emotional foundation of marriage, creating an atmosphere of distrust. Moreover, they may not account for future changes in circumstances, and if not properly executed, they could be invalidated by the court.

Can prenuptial agreements be modified after marriage?

Yes, prenuptial agreements can be modified or updated after marriage. In fact, it’s advisable to include provisions for reviewing and updating the agreement periodically, or when certain triggering events occur, such as the birth of a child or significant changes in financial circumstances. This flexibility can help the agreement remain relevant and fair as circumstances change over time.

How do international elements impact prenuptial agreements?

International elements, such as property in different countries or citizenship in multiple jurisdictions, can complicate the enforcement of prenuptial agreements. Laws regarding prenups vary widely from one country to another. Couples with international ties should seek specialized legal advice in each relevant jurisdiction to ensure the agreement’s validity and enforceability.

Can a prenuptial agreement be challenged in court?

Yes, a prenuptial agreement can be challenged in court if one party believes the agreement was not entered into voluntarily, if there was a lack of full financial disclosure, or if the terms are grossly unfair. Courts prioritize fairness and the best interests of both parties and any children involved. If one party wants to challenge a prenup, they can make an application to the court, and the court will consider factors such as whether the agreement was properly executed, whether both parties received independent legal advice, and whether circumstances have changed since the agreement was signed.

What happens if a couple with a prenuptial agreement has children?

Prenuptial agreements cannot override the rights and welfare of children. Courts will always prioritize the best interests of the children involved. If a couple with a prenup has children and later divorces, the court will ensure that child-related matters, such as custody and child support, are determined based on what is in the children’s best interests, regardless of the prenup’s provisions. Couples may choose to include a provision in their prenup for revisiting the agreement when children are involved to account for these changing circumstances.

Summary

While prenuptial agreements are not watertight, they are usually honoured by the Courts providing the agreement was properly entered into (i.e. with full disclosure and legal advice) and are not manifestly unfair. Prenups can address property, inheritance, debt, and income distribution, but not child-related matters. They offer clarity but may weaken marital trust and can be challenged if unfair or lacking disclosure. Changes over time should be considered when drafting the prenup.

Call the family team on 01202 558844 for further advice on prenuptial agreements or any other family law matter.