A prenuptial agreement can be entered into by couples who intend to marry. They are common in many countries, especially in the US, and are often considered the preserve of the rich and famous, such as the ‘huge prenup’ between Brooklyn Beckham and Nicola Feltz, which recently made headlines.
Prenuptial agreements are typically used to set out the intended outcome of financial matters in the event of a divorce. Whilst it may be assumed that they are more appropriate for marriages where one partner is in possession of a greater estate, they are also a way of protecting future inheritances or the assets of a trust.
What is a prenuptial agreement?
A prenuptial agreement, often referred to as a ‘prenup’, is entered into by couples intending to be married to determine what would happen to their finances and assets following a divorce.
Once married, any assets formally owned by either partner become matrimonial assets and be shared between partners. In the event of divorce, these assets will be considered as part of the matrimonial estate and will need to be determined as part of the divorce and financial separation.
The agreement acts as a means of protecting certain assets if the marriage comes to an end, particularly if one of the partners has significantly greater assets than the other. However, it is important to consider that they are not solely for the rich and famous, and they can have practical uses for everyone.
There are several reasons why prenuptial agreements may be considered., for example, if there is an existing disparity in wealth between partners, an expectation of future wealth for one partner, such as an inheritance, or if business assets need to be protected.
How do prenuptial agreements work?
A prenuptial agreement can involve several issues, and it is essential to consult a solicitor who can advise you on what should be included, such as:
Is a prenuptial agreement binding in UK law?
In the UK, prenuptial agreements are not always legally binding, but following the decision by the Supreme Court in 2010 in the case of Radmacher v Granatino, a wealthy German heiress and her millionaire French husband, prenuptial agreements are seen as possessing ‘decisive weight’.
According to Thomson Reuters Family Law, the current ruling states that: “The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement”
This means that if the prenup is considered fair, it will likely be upheld by the court. However, if the agreement conflicts with the needs of those involved or with children from the marriage, these needs may be considered more important than the agreement.
Can a prenuptial agreement be invalidated?
The court may invalidate a prenuptial agreement for several reasons. For instance,
It could also be invalidated if it appears that:
If you would like to talk to one of our experts in family law about starting the proceedings of a prenuptial agreement, please get in touch today.
