1st February 2016
Pre Nups: To Have or Have not?
Although the multi million pound divorce settlements which are often reported in the press are of little relevance to the vast majority of divorcing couples, the financial consequences of any divorce can be significant and far reaching. It is hardly surprising therefore that couples planning marriage are increasingly considering entering into prenuptial agreements in order to try to retain control over their finances.
So what is a pre nup? Essentially it is an agreement governing financial arrangements not just during a marriage, but crucially, in the event of a divorce. Pre nups can govern all financial issues including what should happen to the family home, how other capital assets should be divided, how pensions should be shared and even whether maintenance should be paid by one partner to the other and for how long.
Understandably, many engaged couples feel that they would rather deal with what should happen to their finances in the (hopefully) unlikely event of a divorce, whilst they are able to do so amicably and on a theoretical basis, rather than against the background of an actual breakdown in the marriage with all the emotional upheaval that brings. However by definition, pre nups deal with future arrangements and so without a crystal ball, it can be very difficult to predict what would constitute a fair settlement in an unknown set of circumstances.
After all, what may seem fair in the context of a short marriage with no children and where both parties work, may seem very unfair some years down the line when one party may have given up a career to care for children! What however is very clear, is that no one should enter into a pre nup lightly, as even though the divorce courts are not currently bound by the terms of a pre nup, increasingly, as long as certain safeguards are met, the courts are enforcing these agreements. So any couple contemplating a pre nuptial agreement should obtain legal advice at the earliest possible opportunity to help them to decide if a pre nup is appropriate for them and if so, what its precise terms should be.