Planning a wedding can be both an exciting and stressful time. A whirlwind of saying yes to the dress, the venue, cake tastings, flower arrangements… the list can go on. The detail that goes into 'the big day' is different for every couple; however, an item often overlooked for addition to the planning list is a pre-nuptial agreement.
Most people will have heard about pre-nuptial agreements. However, there are several misconceptions surrounding them.
Misconception 1: Pre-nuptial agreements are only for the wealthy
A common misconception is that only the rich and/or famous put such agreements in place. This is not true. In fact, the number of couples entering into pre-nuptial agreements is on the rise. This could be down to a number of factors, including those who are entering into a second marriage and therefore have a much greater awareness of the costs and emotional roller-coaster of a disputed divorce action; those who are marrying later in life and have subsequently built up assets prior to the marriage; or perhaps those who have witnessed a loved one go through a divorce and want to protect themselves. Whatever the reason, a pre-nuptial agreement is a written contract signed by the parties before their marriage takes place and there is no "minimum wealth value" requirement.
Misconception 2: Pre-nuptial agreements only protect one party
A pre-nuptial agreement can provide protection to both parties entering into the marriage. In Scotland, most pre-nuptial agreements will identify property owned by each party prior to the marriage which they wish to "ringfence" in the event of a separation. The agreement can also set out what is to happen to jointly owned assets.
Misconception 3: Pre-nuptial agreements are not recognised in Scotland
Whilst pre-nuptial agreements have never been fully tested in the Scottish courts, the general view is that under Scots law, an agreement which has been properly prepared will be regarded as a legally binding and enforceable agreement. The agreement must be fair and reasonable at the time it was entered into. The way in which the agreement has been prepared and the circumstances in which it is signed can be very important to give the best chance of the agreement being upheld in the event of future challenge. Ideally, both parties should have the opportunity to obtain legal advice prior to signing. There must also not be any pressure to sign; therefore it is important to be organised with the agreement and not to be signing it on the way to the venue!
Misconception 4: Having a pre-nuptial agreement is setting the marriage up for failure
Whilst it is true that a pre-nuptial agreement is not the most romantic topic to discuss with your partner, putting an agreement in place is not setting up the marriage for failure. The ability to have open and honest discussions about finances paves the way for a healthy relationship. The majority of people will quite happily have car insurance or home insurance just in case they were to have an accident or something were to happen to their property, but when it comes to the contract of marriage, a pre-nuptial agreement is often overlooked. Having a pre-nuptial agreement is a bit like having an insurance policy. It provides a structure to how you and your spouse will deal with your assets in the event of a separation, which you hope will not happen. Knowing that assets are protected can also assist in making financial decisions within the marriage. A pre-nuptial agreement doesn't just cover personal possessions; it can even provide arrangements regarding the family pet!
Misconception 5: Pre-nuptial agreements cost a fortune to put in place
Yes, there are costs for legal advice involved, but the costs associated with the advice and drafting of the agreement will vary depending on complexity. Once you have had your initial meeting with your lawyer, they should be able to give a rough idea about the complexity of the agreement which is to be drafted. It is worth remembering that the costs of a pre-nuptial agreement will be significantly less than any costs associated with litigating a contested divorce further down the line.
Misconception 6: If you didn't get a pre-nuptial agreement, it is too late
Some couples might not have thought about a pre-nuptial agreement prior to their wedding. The good news is that it may not be too late if there are assets that you wish to protect. A post-nuptial agreement can be entered into post-marriage, provided both parties are prepared to sign.
If you would like to discuss putting a pre or post nuptial agreement in place, the Family team at Brodies can assist.
Contributor
Solicitor
