Valentine's conversations - engagements, living together and pre nuptial agreements
Valentine's Day is one of the more popular days to take the next step in your relationship..
Recent research suggests that Valentine’s Day is the second most popular day of the year to get engaged, and also remains a very popular date for weddings themselves, with approximately three times as many weddings on Valentine’s Day than on any other February day. But with thoughts turning to weddings, is the only question ‘will you marry me’? Should you also be raising the question of a pre-nuptial agreement?
Proposing marriage (or living together) can have significant legal implications for both parties to 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. A pre-nup sets out what will happen to each party’s assets if the marriage does end.
Pre-nuptial agreements are typically associated with celebrities and the super wealthy, but the reality is quite different. They are growing in popularity with entrepreneurs, people with shares in a limited company, or those with a stake in a family business. Equally, people who have received an inheritance (be it large or small) may feel that this money should be considered separately to matrimonial assets. Occasionally it is the protection of future shareholdings or a future windfall that is the motivating factor, or ensuring that children from a first marriage do not lose out on their inheritance as a result of a divorce.
Although pre nups are not 100% binding as this would require a change in the law/statute, they are very likely to be upheld if the agreement meets the criteria that it was entered into freely, with both parties fully appreciating the implications of the agreement, and it is fair to hold the parties to the agreement in the prevailing circumstances at the point of the divorce. 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.
How should a couple discuss a pre-nup – particularly if it is not something that either of them really wants?
Weightmans’ analysis of recent cases shows that almost 20% of our pre–nup cases arose as a result of a Parent or Trustee insisting that their child or the beneficiary of a Trust enters into a pre-nuptial agreement to preserve wealth previously acquired by that family or by a Trust.
Often the requirement only comes to light after parties are engaged, and it can be a testing time for all concerned. Questions may arise during discussions that the couple may not have even considered. It is recommended that they are open and honest with each other about the outcomes they fear and what they can agree is fair.
A pre-nuptial agreement can only be entered into with both parties’ agreement so it is important that they are both fully involved in the discussions rather than leaving it entirely to lawyers – or to their parents.
Over Valentine’s Day, many unmarried couples may discuss moving in together. They must 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 enjoy the romance, but consideration of the legal ramifications of taking a relationship to the next stage should also be given. We advocate early conversations as to whether it is appropriate to put some protection in place to avoid legal problems further down the line.