Prenuptial and Postnuptial Agreements
In England, although it is becoming more common for married couples to maintain separate bank accounts and other investments throughout their marriages or while cohabiting, pre-nuptial agreements are still rare. This is despite a divorce rate of 1 in 3 marriages.
You certainly would not visit somewhere you don’t know without a map, enter into a business partnership without a partnership agreement or buy a car without checking the log book. Marriage is a binding legal contract that has significant financial implications, so it is important to be prepared.
As well as talking about where to live, whether you want to have children and all the other subjects that come up as part of planning your life together, you should talk about money. If you can’t do this, should you really be entering into a legal or financial partnership with this person?
Many married couples never discuss how they are going to arrange their financial affairs and what they would do if they were to split up until the situation arises, and at that time, it will be difficult to think clearly and act sensibly.
A divorce court in England and Wales will start by assuming that a 50:50 split is fair, and then it is up to the party who disagrees to explain why this is not fair in their particular situation. The court has to take into account all relevant circumstances of the case together with a statutory list of factors.
One of these factors will be a pre-nuptial agreement and these have already been successfully used to minimise the award made to the lower earning spouse in a number of cases.
The point of a pre-nuptial agreement is that it shows that the parties have already agreed what they want to happen and so expensive court proceedings can be avoided. However, if either party wishes to settle on terms which differ to those in the pre-nuptial agreement, the court will have to make a decision.
The costs of a contested divorce settlement can easily be at least £20,000.00 for each party, just to reach the final hearing. If the decisions are appealed, the amount can be much more. And that is just the financial cost. There is also the emotional cost and the effects on the family to consider.
It is worth spending between £750 and £1,500 on a pre-nuptial agreement to avoid that expense, and ensure that any eventual financial division is made in accordance with the agreement between the parties themselves and not imposed by a judge.
Where there is a pre-nuptial agreement, the court does not have to follow its terms but it is strong evidence of the parties’ intentions and anyone seeking to overturn the agreement would need good grounds to do so. At Onions & Davies, we make sure that both parties take independent legal advice before signing the agreement and that the agreement is reviewed regularly as the parties’ circumstances change. We can then ensure that the pre-nuptial agreement will provide the desired level of protection to the wealthier party and an indication of the likely outcome on separation for both.
There are other forms of nuptial arrangement that can be used in different circumstances.
© 2018 Onions & Davies. Onions & Davies Solicitors is the trading name of Onions & Davies Ltd, Company Reg. No. 8322297, Registered Office address: 91 Cheshire Street, Market Drayton, Shropshire, TF9 3A. Onions & Davies is authorised and regulated by the Solicitors Regulation Authority (SRA ID Number: 607617)