The Importance of Pre and Post Nuptial Agreements: Research reveals only one in ten couples have an agreement

The vast majority of married or civil-partnered couples in the UK—around 89 percent or an estimated 22.7 million people—do not have a prenuptial agreement, as found by research for Handelsbanken Wealth & Asset Management. The study indicates that younger couples (18-34) are slightly more likely to have a prenuptial agreement compared to 89 percent of those aged 35- 54 and 99 percent of over 55s who do not. 

The primary reason given by 32 percent of respondents for not having a prenuptial agreement is the belief that they will not separate in the future. Whilst this sentiment is stronger among those over 55 according to the study, it is not uncommon for those in later life, entering a second marriage, who have already accumulated or inherited wealth, and have the inheritance of their children to protect, to have a prenuptial agreement in place. Other reasons for not wanting a prenuptial agreement cited by the study, include a preference for equal asset sharing, a lack of concern about asset division, a belief in resolving issues through communication, and a fear that prenuptial agreements could introduce mistrust. Notably, 10 percent of couples were unaware of what a prenuptial agreement is. 

The importance of prenuptial and postnuptial agreements for financial security and protecting inherited wealth, despite the discomfort they may initially cause, has become increasingly recognised in the UK over the last 20 years, largely due to London’s reputation as “the divorce capital of the world”, and the starting point in English family law of equality of division of all assets accumulated during the marriage on divorce. Among those with prenuptial or postnuptial agreements, reasons for having one include financial peace of mind, asset protection particularly for inherited wealth, avoiding legal disputes, and shielding from a partner's debts. Prenuptial agreements are particularly relevant for entrepreneurs and business owners to prevent business disruption, and some individuals reported parental encouragement to obtain one. The research underscores the vulnerability of many UK couples to the financial consequences of an unexpected separation and a general lack of awareness about prenuptial agreements. 

Prenuptial agreements, which are not yet automatically enforceable in the UK but have been increasingly recognised by the Family courts, can provide for asset division if the relationship ends.  The essential principle is that both parties must have understood the implications of the agreement when it was entered into, and it must be reasonably fair to each party – ensuring financial needs are met is essential.  Both parties should take independent legal advice from specialist family lawyers and provide financial disclosure which is sufficient to ensure an understanding of the implications of the agreement.