My child is engaged – how do I raise the issue of a prenuptial agreement?

Prenuptial agreements are now an established part of the legal landscape and have been recognised under English law since 2010 (albeit they are not binding in a contractual sense). For families with significant private capital, they are incredibly useful tools for managing the transfer of intergenerational wealth and can bring clarity and security to what can be a sensitive and potentially thorny issue. However, unlike in many other countries, prenuptial agreements are not yet commonplace or embedded in the English public consciousness. In true English fashion, many people still find the idea of a prenuptial agreement awkward or crass.    

So how, then, do you raise this issue of a prenuptial agreement in a wider family context – for example, if your children are getting married?  

The new normal

Normalise discussions about family finances, to include prenuptial agreements. Involve your children in decision making about family assets and succession. Do not shy away from talking about friends or family who may have a prenuptial agreement, including your own prenuptial agreement if you have one.  Such agreements are only going to become more common due to legal policy focus and demographic changes (such as more people marrying later in life after they have built up assets).  

International issues

Prenuptial agreements are routine in many countries. In fact, in some European countries (such as Germany) newlyweds are required to choose from a number of defined marital property regimes to confirm how their finances will be dealt with if they separate. Signing a prenuptial agreement is simply the English equivalent, save that a couple has more freedom to decide how they want their affairs to be dealt with.  For international families (an increasing demographic), a nuptial agreement is even more important so that the legalities across different jurisdictions can be managed and clarity achieved.  

Framing

There is an incorrect perception that prenuptial agreements are all about ringfencing money and excluding one party. The reality is that there is usually a much broader context, perhaps ensuring a family business remains intact for future generations or preserving the use of a specific property for wider use. Talk to your children about why you think a prenuptial agreement is a sensible idea for them and the wider family. For some, the notion of a prenuptial agreement can even be (dare we say it) romantic – open communication is central to a strong marriage and having a prenuptial agreement is as much about creating a joint foundation on which to build a marriage as it is about planning for the worst-case scenario.  It brings the “money conversation” forward so that a couple can discuss important considerations that may arise in the future (e.g. what will happen if we have children, will one of us step back from work etc) before they marry. If that is not a conversation that the couple are able to have, then it does raise questions about whether marriage and the associated legal consequences are appropriate.  

Focus on fairness

Prenuptial agreements are not contracts and they are not binding. The Court retains a supervisory role and will only uphold an agreement if it is ‘fair’. That is a point that is often misunderstood and which can be worth highlighting to your children. Prenuptial agreements are not about supressing one party or removing someone’s rights - the Court would not permit that. Rather they are a way of allowing a couple to opt out of the default legal regime that will apply if they divorce and instead pick something else that suits their own circumstances (provided it is fair).  

Depersonalise

Do not make a prenuptial agreement about one specific child. It is best to have a blanket ‘policy’ for all children within a generation. If your child knows that their siblings and cousins have entered into, or are expected to enter into, a prenuptial agreement, it can make the conversation much more comfortable. If you make the effort with the first child, this will set a precedent going forward.  

Process and procedure

If there are family structures in place, embed the idea of a prenuptial agreement into them. For example, it is not uncommon for there to be a requirement for a prenuptial agreement in the Articles or Shareholders’ Agreement of a Family Investment Company, or a prenuptial agreement being a prerequisite for beneficiaries of a trust before they receive distributions. Alternatively, if assets are to be transferred personally to the next generation, clear expectations about the need for a prenuptial agreement before any transfers are made can be set out as part of those discussions. In some circumstances, a prenuptial agreement can accelerate the flow of wealth by providing greater security and reassurance to the transferor.  

Timing is everything

Have the discussion as early as possible. Ideally the concept of a prenuptial agreement should not be a surprise to your child, so you can avoid a ‘standing start’ when they tell you the good news. Even so, it can take time to adjust to the idea of a prenuptial agreement and the more time there is to consider this before the wedding the better. A prenuptial agreement should be signed at least a month before the wedding. That means the process of preparing the agreement should ideally start at least three or four months before the big day. The earlier the discussions start, the more smoothly the process should run. Pick your moment to first raise the issue and ideally have that conversation in person. It is possible to enter into a postnuptial agreement after a marriage, but at that stage the dynamic has shifted considerably and there is always the risk that the other party refuses to sign. 

Only Part of the Picture

It is often helpful to think about a prenuptial agreement alongside wider family planning. When your children marry, they should also ensure their affairs are in order – for example putting in place or reviewing a Will and Lasting Powers of Attorney for them and their partner. It may be that you plan on helping your children purchase their first marital home. A prenuptial agreement should not be considered in isolation and it is often easier for a couple to reflect on such agreements as part of a wider discussion about their affairs. 

Support

Recognise that this may be a sensitive issue for your child to raise with their partner and offer to support them in that in whatever way works best for them both. That could be practical support, for example by offering to take part in the discussions with their partner if appropriate or, conversely, keeping your distance and allowing your child to take ownership of the narrative if that is their preference. Another way of easing the possible tensions is to offer to cover the legal costs of the agreement and source legal advisors (as each party will need independent legal advice). 

Take legal advice

If you are not familiar with the law on prenuptial agreements, take the time to familiarise yourself. How can you expect your child to enter into such an agreement if you do not fully understand what you are suggesting?  

Prenuptial agreements are flexible tools that can be used in a diverse range of situations. However, families and individuals are equally diverse, so it is important that the issue is raised sensitively and in a way that speaks to the circumstances of the individuals concerned. When in doubt, speak to a lawyer. As well as handling the technical aspects of these agreements, we routinely guide families through this process and can draw on that experience to provide support.