Prenuptial agreements are an increasingly popular option for UK couples. Whilst no one enters a marriage expecting to separate, with 101,000 divorces in the UK last year, more and more pragmatic spouses are choosing to enter prenuptial agreements (sometimes known as 'prenups').
In doing so, they hope to reduce the risk of an acrimonious or protracted divorce should they ever separate. But what is a 'prenup' and why would you need one?
In this article, partner and specialist family law solicitor Jessica Pitt explains the important facts about prenuptial agreeements - or 'prenups' as they are sometimes known.
What is a prenuptial agreement?
In the UK, a prenuptial agreement is a legal agreement that will set out how assets should be divided between a couple in the event of a divorce.
How does a prenuptial agreement work?
The intention of a prenuptial agreement is to provide clarity and certainty around the arrangements in the event of a breakdown of a marriage, to save the uncertainty, time and stress of arguing about the finances at a later stage. Most commonly a prenuptial agreement is used to protect particular assets so that they can be ring-fenced and prevented from being shared.
Are prenuptial agreements legally binding?
Prenuptial agreements are not automatically legally binding but they will be upheld by a court so long as they meet the qualifying criteria which have been set by the Supreme Court and further reviewed by the Law Commission:
- The agreement must be freely entered into.
- Both parties must understand the implications of the agreement.
- The agreement must be fair.
- The agreement must be contractually valid.
- The agreement must have been made at least 28 days before the wedding.
- There should be disclosure about the wider financial circumstances.
- Both parties must have received legal advice.
- It should not prejudice any children
- Both parties' needs must be met
When should you get a prenuptial agreement?
Prenuptial agreements aren’t suitable for everyone. They are particularly used when one half of the couple has, or is likely to have, significantly more assets than the other. This may be the case for people who have a large inheritance, or are land owners, business owners, or people marrying in later life or after a previous marriage.
Can prenuptial agreements be signed after marriage?
A prenuptial agreement has to be signed before marriage. When a couple have already married but still want some protection, they can have a postnuptial agreement instead. This has the same legal treatment as a prenuptial agreement – the only difference is the timing of it.
Can you make a prenuptial agreement without a lawyer?
No. In order to make a prenuptial agreement binding, both parties must have independent legal advice on the document.
How much does a prenuptial agreement cost?
When we draft a simple prenuptial agreement which ring-fences a specific asset such as an inheritance, the cost will start from £2,000 plus VAT. More assets will add to the complexity of the prenuptial document and the nature of the work required as will the amount of negotiation that is required to reach an agreement.
Of course, each party must be advised by separate lawyers for the prenuptial agreement to be valid. The total cost of a prenuptial agreement to a couple will therefore depend on the fees of the other solicitor advising on the agreement.
Needless to say, prenuptial agreements are always drafted as bespoke documents to fit the requirements of the couple, with both parties having a solicitor of their own. For this reason there is no one size fits all fee and costs range depending on the complexity of the agreement and the nature of the negotiations.
For a confidential discussion about a prenuptial or postnuptial agreement, or the likely costs for you, please contact Jessica Pitt, the head of our family team, on 01392 685 244 or Jessica.firstname.lastname@example.org