The festive season is now in full swing with all the excitement that this time of year brings. For some, this might even be the perfect opportunity to pop the question and swap Christmas fayres for wedding fayres in the New Year. Along with all of the important elements of wedding planning such as finding a venue, arranging flowers and booking the perfect band, there are some family law considerations to bear in mind when entering into a marriage or civil partnership.
Once married or in a civil partnership, the couple immediately acquire certain legal rights under Scots Law and in the absence of any agreement to the contrary, these will govern how any financial matters will be dealt with in the event of the relationship breaking down in the future.
Assets owned prior to the marriage/civil partnership ( with the exception of a property purchased for use as a family home and the furniture for that home) do not form part of the value of the 'pot' to be divided on divorce/dissolution. Any assets acquired by way of gift or inheritance are also excluded. Difficulties can, however, arise when these assets are 'converted' during the course of the marriage/civil partnership. For instance, if an asset owned before the marriage, such as a car, is sold and the proceeds used towards the purchase of a new car, the new car would be "in the pot" for division. Whilst arguments can be advanced in an attempt to exclude the value of the new car from the "pot" these are not failsafe. This is a common scenario and can inadvertently lead to assets which a couple thought were 'safe' taking a leading role in separation negotiations.
It is for this reason that we recommend that the preparation of a pre-nuptial agreement is included on the wedding 'to do' list. Agreements of this nature are becoming increasing common. They are contracts entered into prior to marriage/civil partnership which enable the couple to regulate financial matters in the event of a breakdown in their relationship. The agreement can provide that the assets held by each of them prior to the marriage (and anything deriving from those assets), will not form part of the matrimonial 'pot' to be divided on divorce, avoiding the scenario outlined above.
It is advisable that the pre-nuptial agreement is entered into as far in advance of the wedding as possible to ensure that there can be no suggestion that pressure has been applied in signing it. The spouses/partners will require to obtain separate legal advice, or at least have had the opportunity to obtain this advice. These steps provide protection from any challenge to the agreement. Whilst discussing a pre-nuptial agreement with a loved one is perhaps not the most romantic of conversations, it is prudent to do so and the costs associated with putting an agreement in place are modest in comparison with the fallout from a situation where assets inadvertently end up forming part a claim down the line.
If the marriage has already taken place, all is not lost, and a post-nuptial agreement can be prepared in similar terms to a pre-nuptial agreement. It can also, for instance, be used to regulate a specific transaction.
If you wish for further advice in relation to this or any other family law matter, please do not hesitate to get in touch with a member of our family law team.
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