A Quick Introduction to Nuptial Agreements
What is a nuptial agreement?
The purpose of the nuptial agreement is to record what would be included in the financial settlement if the parties were to divorce and also record, the assets that are to be ring-fenced i.e. kept apart from the matrimonial assets. A nuptial agreement entered into before the marriage ceremony is called a pre-nuptial agreement and a nuptial agreement entered after the marriage ceremony is called a post-nuptial agreement.
The parties to the nuptial agreement can agree to ring-fence assets such as property, pensions accrued before the parties met and the parties can agree that future inheritance be kept separate from joint assets.
A nuptial agreement made before the civil partnership ceremony is known as a pre-civil partnership agreement. An agreement entered into after the civil partnership ceremony is also known as a post-civil partnership agreement.
Will they stand up in court?
The key point for many people, is whether these agreements will stand up in court in the event of a divorce.
Nuptial agreements are recognised in this country and in the Supreme Court case of Radmacher v Granatino , it was considered the weight that should be given to a nuptial agreement by the courts. The majority in the Supreme Court held:
“The court should give effect to a nuptial agreement that is freely entered into by each party with full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement”.
When parties are beginning the process of entering into a nuptial agreement they must have regard to the following:-
- The parties must enter into the agreement without undue pressure or influence;
- Both parties receive independent legal advice. The parties must be informed of its implications and be advised independently of its terms by their solicitors.
- There is full and frank financial disclosure so that both parties provide an accurate snapshot of their finances.
- With regard to a pre-nuptial agreement/pre-civil partnership agreement, the document is signed at least 28 days before the ceremony.
Although not an exhaustive list, the above records the key elements a judge will consider when deciding whether to uphold the agreement. A judge may decide not to hold the parties to an agreement if the agreement does not meet the financial needs of the parties and any future children.
How do nuptial agreements help?
More and more couples are entering into nuptial agreements. Some of the advantages of entering into a nuptial agreement are that:
- They enable the parties to agree what property belongs to that party alone and will it be shared on any future divorce or dissolution (ending of a civil partnership);
- They can prevent fewer arguments about finances should there be a divorce or dissolution;
- They can help build trust between trust between the parties by helping to start difficult discussions about money. By having these discussions there can be open and honest communication about the parties’ intentions before the marriage or civil partnership ceremony.
Once the decision is made to enter into a nuptial agreement, both parties should take independent legal advice from a family law solicitor before the agreement is signed.
This article was prepared by Diane Flowers, a solicitor in our family law team. We offer an initial fixed fee interview for a reduced price of £100 plus VAT to discuss the issues raised in this article. Please call 020 8464 4242 or email email@example.com to find out more.