To pre-nup or not to pre-nup – that is the question
With summer wedding season just around the corner and thoughts of champagne, flowers and invitations in the air, often contracts and legal advice are…
With summer wedding season just around the corner and thoughts of champagne, flowers and invitations in the air, often contracts and legal advice are far from the minds of couples planning their big day. However - could a pre-nuptial agreement be icing on the cake?
Proposing marriage or cohabitation can have significant legal implications for both individuals in a relationship, whether you are the financially weaker or stronger party.
Pre-nuptial agreements are on the rise in popularity. A pre-nuptial agreement (or "pre-nup") is a formal written document prepared in advance of marriage. Pre –nups tend to be sought by the financially stronger party within a relationship, where there are assets to safeguard, possibly from an inheritance or future anticipated inheritance or where one party has previously been divorced. Pre-nups can be common for second marriages. A pre-nup sets out what will happen to each party’s assets if the marriage does end.
Whilst pre-nups are not yet 100% binding, they are now generally implemented and accepted by the court unless they are considered unfair.
There are specific rules to follow to ensure your pre-nup has as much weight in law as it can have. Taking advice from a Family Law specialist is therefore essential.
What are those safeguards? Any agreement should be freely entered into, parties should fully appreciate the implications of any agreement, and it cannot be unfair. It needs to meet the financial needs of both parties, and of any children. The document must also have been signed at least 28 days before the wedding.
Unmarried couples thinking about moving in together should also consider the legal implications which flow from such a commitment.
Despite common belief, there is no such status as a "common law spouse" and cohabitees can be left very vulnerable in the event that their relationship breaks down. Unlike married spouses or civil partners, cohabitees cannot claim maintenance for themselves or a share of their partner’s capital assets or pension. This is regardless of the length of their relationship. Any property claims they may have will be limited to any interest they are able to establish under land or trust laws which can be complex, stressful and costly to prove. If there are children involved, there is a legal regime to address the financial needs of children but it is fairly limited in scope.
It is possible to enter into a cohabitation agreement which can set out in black and white how any assets should be divided in the event that the relationship breaks down. It can also deal with how you wish to provide for any children of the relationship and deal with any joint purchases such as a family car. Provided both parties enter into a cohabitation agreement freely, it is drafted properly and both parties receive independent legal advice, there is every likelihood that such an agreement would be legally binding. Specialist legal advice should be taken.
Of course, we should embrace this wonderful season and enjoy the romance, but consideration of the legal ramifications of taking a relationship to the next stage should also be given, with thoughts as to whether it is appropriate to put some protection in place to avoid legal problems further down the line.