Parents who have gifted property to their children are being warned they could be landing their...
A voluntary written agreement signed by a couple prior to marriage (or Civil Partnership) enabling them to decide what should happen to their assets/property in the event of a Divorce.
Such agreements are particularly relevant to older couples marrying or a second marriage where each party may already have assets or savings they wish to protect for themselves, their children or their business.
They are also needed where one of the couple has significant assets compared to the other.
Pre-nuptial agreements are not legally binding and cannot override the jurisdiction of the Divorce Courts but recent cases show that the Courts will take them into account in divorce proceedings and if they satisfy the test of fairness they are likely to be upheld.
Requirements are that the agreement is fair at the start – neither party being under pressure to sign, the agreement having been made at least 28 days before marriage, each party fully understanding the implications of that which has been agreed having made full and frank financial disclosure of all assets to the other party and each having sought independent legal advice.
The agreement must remain fair – future events such as the birth of a child or ill health may make an agreement unfair later. It is vital therefore, that all aspects of a pre-nuptial (or indeed a post-nuptial) agreement are properly and fairly considered from the outset with the benefit of sound legal advice.
On divorce the starting point is that all assets are divided equally between the parties. However, if assets belonging to one party are ring-fenced before marriage by a pre-nuptial agreement it could protect all of that client’s pre-marriage assets.
A pre nuptial agreement can be reinforced by converting it into a post nuptial agreement after a marriage or civil union. A post nuptial agreement can be entered into in the absence of a pre nuptial agreement.