A Quick Guide to Prenups

What is a prenup?

A prenup is a document which a couple sign, before they get married, to set out what the financial settlement would look like if they got divorced and to "ring-fence" any assets that one or both of them is bringing to the marriage, or that they may inherit during the marriage.

Ideally it is quite a flexible document; a prenup may deal with what would be the impact on the financial settlement of children being born to the couple and one of them giving up work, of one of them falling ill and not being able to work, or of a short, medium or long marriage. 

Even if you don't have a huge amount of money, should you still get one?

The benefit of having a prenup is that it gives certainty and minimises the risk of an expensive fight if Divorce happens. Couples have autonomy to decide how they wish to split their assets, rather than leaving everything to chance. 

For instance, a rental property may be owned by one person, often looked upon as their “pension” for later life. There may be limited equity in that property, but it provides a good source of income. If Divorce occurs, that property may well be sold and any equity split equally. What then for retirement? Savings and other investments received perhaps through an inheritance, may end up having a similar fate.     

What should you do if your partner asks you to sign one?

Talk through the reasons why your partner feels it is appropriate.  Take proper advice from a specialist family lawyer so that your “head rules your heart” and you know your rights. Don't be afraid to ask for a fair deal, taking into account your needs both now and in the future. Understandably this can seem like a daunting task - most people are busy putting the finishing touches to their special day and don't want to be spending time discussing a prenup!

Very often, marriages that don’t stand the test of time, involve an element of financial mistrust and disagreement. A lack of financial transparency between a couple, or misconceptions over how assets might be treated can lead to resentment and unhappiness. Talking through financial aspects before you tie the knot, is a good opportunity to go into your marriage with open eyes about what the financial picture is and what it would look like in the event you might get divorced. If your partner is driving the request for a prenup, then your lawyer will be there to advise and protect you.

How do you get a prenup?

A prenup in England & Wales (note there are different requirements in Scotland) is a sophisticated document and specialist advice is needed to make sure it is tailored to your family requirements. 

It is very important that:

- it is signed at least 28 days (and usually no more than 12 months) before the wedding;

- there is full and frank disclosure on both sides of the finances;

- you both have independent legal advice;

- its terms are fair; hence time must be taken to think about what would be the impact of future life events and the length of the marriage. 

They can take a few weeks to negotiate, depending on complexity and the negotiating positions taken, so if you are the one pressing for a prenup you are sensible to start the process at least 4-5 months before your wedding date. 

How much do they cost?

Costs will vary significantly, though a properly drawn up prenup is likely to cost from about a thousand pounds. A more complex prenup, involving substantial assets, perhaps trust funds & settlements, tax issues and foreign properties may cost more.  

This may sound like a lot of money, indeed it is.  However, how does the cost compare to the amount being spent on your wedding? Also, how does this compare to the cost of working out a divorce financial settlement if it all goes wrong? The price of protection is often only a fraction of these costs. If a couple end up divorcing without a prenup and needed to go to Court to sort out their financial settlement, then the costs of doing so may be tens of thousands of pounds. A prenup is an insurance policy against that sort of eventuality, because you are very significantly narrowing the scope for future claims. 

Can you sign a prenup after you are married?

Yes; this is called a "postnup". Sometimes couples have a postnup because they start prenup negotiations too late and miss the boat; sometimes it is because one of them is unexpectedly coming into money, perhaps an inheritance or a lifetime gift from a relative. Either way, postnups have the same legal standing if they are properly entered into. However, there is nothing that quite focuses the mind like a wedding date on the horizon! In my experience, it’s far better to get the issue resolved before you tie the knot!

At Awdry Bailey & Douglas we can help you prepare a prenuptial agreement that can stand the test of time. 

Contact Peter Berry on  01672 518620, or via email on peter.berry@awdrys.co.uk where he will be happy to offer a free until consultation or or visit our dedicated Family Law pages on our website.

Written by:

Meet The Lawyer - Georgina Catlin

GEORGINA CATLIN - OVER TO YOU…

TELL US A BIT ABOUT YOURSELF?

I am really interested in health and wellness and try to adopt daily routines where I can.  These encourage me to stay motivated when approaching work/life challenges or to stay calm when life becomes stressful.  This might include meditating or listening to a motivational speaker in the car on the way to work.  I am very family orientated and I love spending time with my twin sister, whether it is supporting my 6ft 5 rugby playing brother on the edge of a rugby pitch, or going for long country walks. Although we are very much a Rugby family, I do occasionally put my Man United hat on when watching the football with my partner! 

WHAT AREA OF LAW DO YOU WORK IN?

Family Law - which can be very broad and covers most issues that arise as a result of a relationship breakdown.  This could range from a divorce or separation and the associated financial issues that need to be resolved, or alternatively dealing with issues in relation to child care arrangements.

TELL US ABOUT  YOUR JOURNEY TO THE LAW?

I initially studied Law and Criminology at University but I soon realised that my passion was for the Law and not the intricacies of how and why people broke the law!  Upon graduating, I began working for ABD as a Family Law Secretary in order to gain legal work experience and commenced studying the Graduate Diploma in Law part time.  I developed a keen interest in Family Law and thereafter began training as a Solicitor whilst completing my LPC part time.  I am due to qualify in November 2018 and hope to continue my role as a Solicitor in the Firm’s Family Law Department.  

    

WHAT ARE 5 WORDS A CLIENT WOULD USE TO DESCRIBE YOU?

Tall.  Approachable. Conscientious. Understanding. Positive. 

WHAT WOULD YOU SAY HAS BEEN YOUR CAREER HIGHLIGHT TO DATE? 

Having the opportunity to see my client’s positive reaction immediately after a successful outcome at a Financial Court Hearing.

WHAT/WHO INSPIRES YOU?

Many of my colleagues inspire me on a day to day basis.  Although on a more personal note, I would have to say my Mum as she has fully supported me at all stages of my life and career so far.

WHAT DO YOU ENJOY TO DO OUTSIDE OF WORK?

I love to eat good food and drink good wine whilst socialising with my partner, friends and family.  I also enjoy exercising, which mainly involves early morning running outdoors or attending gym classes in order to burn off the food and wine! I love the outdoors and really enjoy wandering around beautiful gardens and going to the theatre.  When I am not doing the above, I enjoy watching a good old action film with a bar of chocolate whilst relaxing at home with my partner. 

Could Civil Partnerships be on the horizon for all couples? In the meantime, what can the rest of us cohabiting couples do to protect our finances?

The Supreme Court recently ruled in favour of Rebecca Steinfield and Charles Keidan, whereby a panel of 5 Supreme Court Justices declared that the Civil Partnership Act 2004 is “incompatible” with their human rights and amounts to discrimination.   

Steinfield and Keidan believe that the institution of marriage is sexist and patriarchal and sought a judicial review of the Civil Partnership Act 2004, as it does not permit couples of the opposite sex to enter into civil partnerships.  As we already know, the Civil Partnership Act 2004 provides same sex couples with the same legal rights afforded to married couples upon dissolution or divorce.  

Time will only tell as to whether the Government will act upon the ruling and amend the current legislation one way or the other.   

In the meantime, according to the office of national statistics, cohabiting families were the second largest family type in the UK at 3.3 million families last year. So, what steps can cohabiting couples currently take to protect their financial position?

Here are a few suggestions which could avoid the need for costly Court Proceedings:

1. Cohabitation or Separation Agreements – These are contractual agreements that record the parties’ intentions regarding the finances of their relationship while they live together and also if the relationship breaks down.  It is important that such documents are drafted correctly to avoid their validity being called into question.    
2. Declaration of Trust – if you have made an unequal contribution towards the purchase of a property, you may wish to consider recording the contribution by entering into a Declaration of Trust recording what should happen to the proceeds of sale if the property is sold.   
3. Make a Will – If you do not make a Will your estate will pass under the rules of Intestacy which will mean that your cohabitee will not benefit in any way which may not accord with your intentions. 

For more information or if you would like to book a free initial consultation, call Georgina Catlin at ABD Chippenham now on 01249 478333.