Should you consider a prenuptial agreement?

A prenuptial – or premarital – agreement is a written contract a couple enter into prior to their marriage, to set out their intentions as to how assets, debts, income and inheritances will be divided if they separate or divorce.

Whilst prenuptial agreements cannot override the discretion of the Court to consider financial matters upon divorce, judges take the terms of these agreements into account, as evidence of the intentions of both parties about what should happen if the marriage breaks down.

Indeed, judges often decide it is appropriate to uphold the provisions of a prenuptial agreement, provided that certain court guidelines have been followed when the agreement is being prepared.

We continue to see a rise in the popularity of prenuptial agreements, and there are a range of circumstances where they can be particularly useful, including:

• Protecting assets which you have acquired before getting married
• Ring-fencing an inheritance, both already received and future inheritances
• Where the parties are marrying in later life (particularly if they have children from previous relationships)
• Providing certainty and avoiding conflict if the relationship ends
• Safeguarding specific assets, such as a business.

For those already married, they could consider a postnuptial agreement. This can be used in the same way as a prenuptial agreement, save that it is entered into after the marriage. Postnuptial agreements are sometimes put in place if the couple have been through a difficult patch, or one of them is shortly to receive a gift or inheritance from family.

It is worth noting that the validity and enforceability of prenuptial and postnuptial agreements will depend upon various factors, including (in the case of a prenuptial agreement) the document being signed in good time before a wedding, both parties having made full disclosure of their financial position and the agreement meeting the needs of both parties and any children. It is essential that both parties have taken independent legal advice before signing a prenuptial or postnuptial agreement.