As people in the UK now tend to marry later in life than in previous generations, there are increasing numbers of women who are well established and successful in their lives and careers before they even consider getting married. Of those who do go on to tie the knot, many will have accumulated savings or investments, or may already own their own home. Often their intended spouses (or civil partners) may be in a similar position. As such, it is important that women are able to take decisive action to protect their pre-marital wealth and plan for their financial future. On this International Women's Day, we consider how a pre-nuptial agreement can be key to providing women (or indeed anyone) with financial peace of mind as they look forward to married life.
What is a pre-nuptial agreement?
A pre-nuptial agreement is essentially a contract between two people who intend to get married or enter into a civil partnership. Pre-nuptial agreements are generally designed to protect the assets held by either or both parties prior to the marriage by ring-fencing those assets and keeping them out of the "pot" which would be divided up between the parties in the event of a separation. Different kinds of assets can be protected in this way, whether that be savings, stocks and shares, property, or an interest in a family business. In some cases, a couple may want their pre-nuptial agreement to go further – setting out an agreed position of how some or all financial matters will be dealt with in the event of a divorce or dissolution.
Are pre-nuptial agreements legally binding?
In Scotland, pre-nuptial agreements are generally considered to be legally binding contracts and can only be challenged in limited circumstances. The Family Law (Scotland) Act 1985 – the legislation that provides the framework for dealing with financial matters on divorce and dissolution – enables the court to take into account any agreement entered into between the parties to the marriage or civil partnership. Provided that the agreement was fair and reasonable at the time it was entered into, both parties have adequate time to consider and get advice about the agreement, and neither party was pressured by the other into signing, it is likely that the agreement will be upheld. So, anyone entering into a pre-nuptial agreement should expect to be bound by it.
I am already married – is it too late to get a pre-nup?
It is possible to enter a post-nuptial agreement at any time following a marriage or civil partnership. A post-nuptial agreement serves entirely the same purpose as a pre-nuptial one and is very similar in terms of format and content. Pre-nuptial agreements should be concluded well in advance of the wedding, so in some cases where that is not possible the couple may decide to wait until after the wedding and sign a post-nuptial agreement instead. Post-nuptial agreements can also be used to deal with specific financial events or asset purchases, which parties may want to deal with in a particular way.
How do I discuss the topic of pre-nups with my fiancée?
Many people may be apprehensive about discussing the prospect of a pre-nuptial or post-nuptial agreement with their future spouse, or worried that it may seem pessimistic or cold. Although probably not the most romantic of conversations, arguably it's better to have an open and honest discussion about financial plans and expectations before tying yourself legally and financially to another person. Aside from that, having a pre-nuptial agreement could enable a separating couple to avoid litigating in court over financial matters, and the significant time and cost that can involve.
Should you require any advice in connection with protecting your wealth pre-marriage or during marriage, please get in touch with one of our family law experts.
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