The importance of a pre-nuptial agreement

After the proposal has been made, the ring chosen and a date set for the big day, couples need to consider the legal implications of marriage. For those who have current or future wealth or who are marrying for the second or third time, pre-nuptial agreements are particularly important.

Pre-nuptial agreements are commonplace in Europe and in other parts of the world such as the USA. They have attracted a great deal of publicity over recent years and they are no longer the preserve of the rich and famous.

However, whilst the term “pre-nuptial agreement” or “pre-nup” may now be well-known, what they actually are and do is less known, so below are answers to some of the key questions that are often asked:


What is a pre-nuptial agreement?

It is an agreement made between a couple, before they are married, which sets out how they have agreed their assets and income should be divided in the event of a divorce. The agreement may take into account the assets which are currently owned, future assets that may be inherited or gifted, business interests and worldwide assets. It will address the individual circumstances of the couple.

Why do people have a pre-nuptial agreement?

Many couples, whilst not contemplating divorce, want to retain control of their financial position and to have certainty in the event a divorce occurs rather than risking arguments or leaving it to a court to decide (and incurring the associated legal costs) if they cannot agree. Other couples may be encouraged to do so due to family wealth or business interests that they will receive which the family wishes to retain for future generations. As many couples are marrying later in life, or entering into a second or third marriage, they may have their own financial resources which they wish to keep separate and apart in the event of a divorce, especially if they have children from a previous relationship.

In summary, most couples wish to enter into a pre-nuptial agreement to allow them to have control over their assets, now and in the future, rather than risking uncertainty, court proceedings and higher legal costs. A pre-nuptial agreement helps to ensure a more predictable financial resolution at an already very difficult time.

Are pre-nuptial agreements legally binding?

The courts have made it clear that agreements which are entered into freely and with a full understanding of their implications should be upheld unless it would not be fair to hold the parties to the agreement, which will only be in exceptional circumstances. If you enter into a pre-nuptial agreement you should expect to be held to the terms that you have agreed. They are not yet legally binding (the government needs to change the current law first) but they are frequently being upheld by the courts and are a good indication of what the couple thought was “fair and reasonable” which will be a very persuasive factor, if not the determining one.

How do you raise the idea of a pre-nuptial agreement?

A pre-nuptial agreement is not the most romantic proposi-tion to suggest to your loved one! It can, understandably, be a very difficult subject to raise but there has been a significant change in attitudes towards these agreements over the past five years and they are certainly more commonplace than most people expect. If the pre-nuptial agreement is being entered into as part of wider family wealth planning then it may be raised by other family members or their advisers.

The agreement needs to be seen as being of benefit to the couple and is a document that they hope that they will never use - somewhat like an insurance policy. It can often be very useful for the couple to go through the negotiations sur-rounding a pre-nuptial agreement to help them resolve how they actually want to run their finances during the marriage.

What do you need to do?

It is essential to take legal advice as the couple need to be fully aware of the legal implications of entering into the agreement. Full financial information should be provided by both parties and there will be frank discussions regarding the finances so that an agreement can be reached. The terms of the pre-nuptial agreement vary in each case and are tailored to the individual circumstances; no one couple will be identical to another.

What is crucial is that the difficult discussion takes place as early as possible. In a Law Commission report, which supported pre-nuptial agreements, it was made clear that the agreement should be signed at least 28 days before the wedding and therefore sufficient time needs to be allowed prior to the wedding date for the negotiations to take place, for both parties to take legal advice and for the agreement to be finalised and signed.

Pre-nuptial agreements are no longer only for celebrities and the super wealthy. They are now used by many more couples and there has been a continual increase in their popularity, the momentum of which looks set to continue. They certainly will be on the check list of many couples over the forthcoming wedding season and should be an essential part of the wedding administration which needs to be dealt with sooner rather than later.


This article first appeared in Surrey Life.

This article was written by Shona Alexander. For more information, please get in contact with Shona on +44 (0)1483 252 514 or via shona.alexander@crsblaw.com.