Pre-nuptial Agreements, Pretentious or Practical?

Over the years many married couples in the UK have tended to avoid using pre-nuptial agreements, seeing them as fitting uncomfortably with the ‘what’s mine is yours’ ideal of marriage. However, such agreements offer soon to be married couples a number of advantages, perhaps more obvious to those who have previously been married and suffered a painful divorce.

Often, pre-nuptial agreements are only thought of as ever being relevant during divorce proceedings. However, they also offer benefits during the relationship as well as in the event of separation. They can be used to set out each partner’s responsibility towards paying a variety of joint outgoings during the relationship; this may, for example, include outlining how much each partner is to contribute towards any mortgage.

As well as this, partners are able to commit to providing for the future of any dependants beyond any possible separation. Couples can ensure that the future welfare of their children, or any dependent relatives, is given due weight during divorce proceedings which predominately concentrate on what is fair and equitable for the partners involved.

Of course, the benefit most commonly associated with pre-nuptial agreements is the ability for partners, whilst happy in their relationship, to set out their approach to assets and liabilities in the event of separation. Such an agreement can act as a form of insurance, allowing partners to ring fence any assets which both partners feel should not be included in any future settlement – e.g. any property now inherited or likely to be inherited during the marriage.

In the past pre-nuptial agreements have not been given much weight during divorce proceedings. However, this is set to change with the recent Radmacher (formerly Granatino) v Granatino case.  The Supreme Court declared it will be natural to assume that a couple entering into such an agreement can expect it to be enforced should their relationship break down.

While judges will still not be obliged to enforce the provisions in any pre-nuptial agreement, the Supreme Court has set out guidelines for judges and encouraged them to give effect to pre-nuptial agreements provided certain conditions have been met. Both partners must seek independent legal advice before signing the agreement and have fully disclosed their finances – an agreement based on misinformation will not be upheld. Both partners must sign the agreement of their own free will, under no pressure from the other.

The benefits for married couples of pre-nuptial agreements are also available to civil partners and cohabiting couples in the form of civil partnership agreements and cohabitation agreements. While setting out a separation agreement with your partner may seem negative, tidying legal matters at the start of a new stage in life is a very positive move.