The recipe for a solid prenuptial agreement
Prenuptial agreements aren't legally binding, so you need to make sure yours is fair and realistic. Find out what this means in our handy explainer article.
A prenuptial agreement is one made between a couple about to be wed, whether in a marriage or a civil partnership. A version of this agreement can also be made once the couple is married. This second kind of document is known as a postnuptial agreement or "postnup".
Prenups and postnups share an aim: to set out how assets will be divided in the event of divorce or dissolution. What do we mean by "assets"? It's a broad term that encompasses wealth, property, income,
inheritance and even debts.
Prenups attract misconceptions. Aside from the widely-held misbelief that they're the preserve of the celebrity class, there's the sense that they're somehow pessimistic. In fact, they're a form of insurance like any other. They let you decide what will happen to your assets rather than the court.
It's important, however, to note that prenups aren't legally binding in England or Wales. Judges tend to give weight to prenups, but won't enforce them. And the weight given will depend on the validity of the agreement.
For a prenup to be valid, it has to be fair. Part of this is that both parties need to have received independent legal advice before signing.
The alternative is to go to all the trouble of creating a prenup only for the court to decide anyway – an expensive waste of time.
In this article, we look at what should and shouldn't be included in a prenup. Follow this recipe and you'll have a solid agreement – but please be sure not to take this as legal advice. It's highly advisable for both parties to instruct solicitors before entering into any agreement.
What can be included?
Like a will, a prenup is a personalised and "living" document. That means two things. First, every prenup is different. Second, it can be revised as the marriage or civil partnership goes on.
Despite these differences, prenups will usually include some or all of the following:
- Bank accounts and liquid assets (those that can be converted quickly into cash). You can use a prenup to specify how a joint account will be split.
- Businesses you own.
- Debts. If your partner has incurred debts, you can specify that they won't be your responsibility when you separate. These debts could be, for instance, student loans, credit card debts or mortgages.
- Inheritance.
- Premarital assets – those things, including properties, you owned before marriage and which became mingled in your marital finances.
- Stocks and shares. You can choose to keep your stocks and shares separate. Or, if you have some and your partner doesn't, you can specify that you keep them on separation.
How can you make sure your prenup is upheld?
The simple, though technical, answer to this is that the prenup can't conflict with
section 25 of the Matrimonial Causes Act 1973.
That means that it must be made at least 28 days before marriage. The agreement must be entered into "freely and knowingly". Any pressure or duress will invalidate the agreement.
This is one major reason why both parties must have received independent legal advice from separate family law solicitors. It demonstrates to the judge that you knew what you were getting yourself in for. On top of this, a solicitor will have the expertise to spot and amend or remove any language that a judge might consider to be biased towards one party over another.
There's a legal precedent for this that highlights its importance. In the case of
V v V
(2011), the judge ruled that the prenup was invalid because it was signed under pressure and without independent legal advice.
Next, both parties must fully disclose their assets. In
Kremen v Agrest
(2012), the court overturned the prenup because the husband didn't fully disclose his financial circumstances.
The agreement should be fair and realistic. That means both parties must be able to meet their financial needs after divorce or dissolution. If the agreement leaves one person in comfort and the other in need, the judge will throw it out.
We see this in the case of
BN v MA
(2013). The prenup in question would have left the wife in need – so the judge ruled that it was unfair and invalid.
Finally, the prenup needs to provide for children – both alive or yet to be born.
We mentioned that a prenup is a "living" document. It's not set in stone. It can be prudent to periodically review the agreement to ensure that it's still fair and realistic.
To this end, you can even include a "review clause". This could specify that the agreement will be reviewed every, say, five years. As well as this, you can list events that will "trigger" a review. These include the birth or adoption of a child, a redundancy or time off work due to illness or disability.
The bottom line is that you need independent legal advice to ensure that the prenup is fair. That's why online prenups tend to be dismissed as invalid by the judge. You need legal expertise in writing up those terms and clauses – otherwise, it could be deemed not worth the paper it's printed on.
What shouldn't a prenup include?
A prenup is a financial document, so anything relating to child support, lifestyle matters or domestic duties should be omitted.
You also shouldn't include different outcomes for different eventualities. If the marriage or civil partnership ends because of adultery, for instance, that shouldn't affect the agreement.
Are you looking for help writing a prenup? Do you want to learn more about the process? Then please don't hesitate to
get in touch. Here at Milners, our
family lawyers provide a flexible, approachable and no-nonsense service – and we pride ourselves on tailoring your case to your individual needs to give you the best chance should the worst happen.
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