Prenuptial Agreements UK: Essential Things You Need to Know

What is a Prenuptial Agreement UK?

A prenuptial agreement, often referred to as a prenup, is a legally binding contract entered into by a couple before marriage or a civil partnership.

A prenup agreement allows couples to predetermine and manage many of the legal rights and obligations they will acquire upon marriage. It specifies what happens to their assets in the event of a divorce or death.

Prenuptial agreements are particularly useful in superseding the default marital laws of England and Wales, which would otherwise govern the division of property, savings, and spousal support.

One alternative to a prenup is a ‘postnup’. A postnuptial agreement is similar to a prenuptial agreement but is entered into after the couple is married or in a civil partnership. They are useful if there have been significant changes in the couple’s financial circumstances or if they wish to reinforce the terms of an existing nuptial agreement.

You need experienced prenuptial agreement solicitors to help draft the written legal document. Writing a prenup yourself from a free template is not recommended for several reasons.

Firstly, you risk the Judge throwing out your prenup if it hasn’t been drafted correctly and legal advice hasn’t been sought. Furthermore, legal clauses relating to inheritance, businesses, or how assets acquired during the marriage are to be dealt with could be done incorrectly, costing you dearly in the future.

Are UK prenups legally binding?

Prenuptial agreements are legal in the UK in the sense that courts consider them within financial proceedings in a divorce. Despite years of campaigning, prenup agreements are still not automatically legally binding.

The landmark 2010 Supreme Court case of Radmacher vs Granatino significantly altered this legal landscape. The decision in this case marked a shift in both societal and judicial perspectives regarding the autonomy of married partners.

The Supreme Court ruled that prenuptial agreements can now be enforced, providing they meet specific criteria. For a prenuptial agreement to be upheld under the Radmacher ruling, it must satisfy a three-stage test:

1. Voluntary Agreement: The agreement must be entered into freely by both parties.
2. Full Disclosure: Both parties must fully understand the implications of the agreement and provide full disclosure of their financial situation.
3. Fairness: The agreement must be fair and not leave one party at a significant disadvantage, particularly considering the welfare of any children involved.

The courts retain the discretion to enforce prenuptial agreements as part of divorce settlements under Section 25 of the Matrimonial Causes Act 1973. Judges will generally uphold a premarital agreement that meets the Radmacher test, provided it is fair in the given circumstances.

In 2014, the Law Commission released a report on Matrimonial Property, endorsing the Radmacher decision. The Commission recommended the creation of a ‘qualifying nuptial agreement’ regime, which would make prenuptial agreements fully binding if certain conditions are met.

However, these recommendations have yet to be implemented by Parliament.

The Radmacher v Granatino case was a turning point for prenuptial agreements in England and Wales, aligning them with contemporary views on personal autonomy within marriage. This shift allows couples greater control over their financial affairs, but it is essential to balance this with protections that ensure fairness and prevent undue hardship.

How to get a prenuptial agreement

To obtain a prenuptial agreement in the UK, you should follow these steps:

1. Early Consideration: Begin the process well before your wedding date. It is recommended that a prenup be signed at least 21-28 days before the marriage to avoid any suggestion of duress, which could affect its enforceability.
2. Full Financial Disclosure: Both parties must provide a complete and honest account of their financial situation. This includes disclosing all assets, debts, and income.
3. Independent Legal Advice: Each party should seek independent legal advice. This ensures that both individuals fully understand the agreement and its implications. The advice also helps to demonstrate that both parties entered into the agreement voluntarily.
4. Draft the Agreement: A solicitor can help draft the prenup, ensuring that it is tailored to your specific circumstances and it includes all necessary provisions. The agreement should be fair and consider any future changes in circumstances.
5. Review and Negotiation: Both parties should review the draft and if necessary, negotiate any terms. This might involve several rounds of discussion and revision to ensure the agreement is mutually acceptable.
6. Sign the Agreement: Once both parties are satisfied with the terms, the prenup should be signed. It is also advisable to have witnesses who are over the age of 18 and independent of the parties involved.

It’s also a good idea to review and possibly update the prenup periodically, especially after significant life events like the birth of children or major changes in finances.

When is signing a prenup a good idea?

Whether couples should get a prenup is entirely up to them, however, here are six specific scenarios when getting a pre-nuptial drawn up could be beneficial:

1. There is a disparity in wealth between the parties – It’s common for one party to want a prenuptial agreement if they enter the marriage with considerably more wealth. Without a prenup, they would stand to lose more than the other spouse in the event of a divorce and a division of assets.
2. There is a future inheritance for one party – Safeguarding a future inheritance is one of the most common reasons for wanting a prenup if one spouse is expecting to receive a future inheritance.
3. One party has a business to protect – If one partner owns a business before marriage, a prenup can ensure the business is considered separate property and not subject to division upon divorce. This can prevent the business from being disrupted or having to be sold to satisfy a financial settlement.
4. Pass assets to children from prior marriages – The agreement you reach can dictate the rights of children from a previous marriage regarding property or assets should the marriage break down. The most common clause in this respect is for property owned before marriage.
5. Prevent debts from becoming jointly owned – If your partner brings debt with them into the marriage, you can include a debt clause in the contract. The agreement doesn’t just protect you against existing debt, it can also go some way to protecting against debt liability should either spouse build up debts during the marriage.
6. Your partner has debts: If one partner has substantial debt before marriage, a prenup can protect the other partner from being responsible for this debt in the event of a divorce.

How much does a prenup cost?

Costs for preparing a prenup can range from £1,000 to £5,000 plus VAT when instructing local family law solicitors.

Some firms such as Divorce-Online offer fixed fee packages starting from £849 including VAT.

The total cost of preparing a prenup will depend on the complexity of the agreement and the legal professionals involved.

What can you include in a Prenup?

A prenuptial agreement should cover financial matters only, and can include the following:

• Debts – This can include credit card debt, student loans, and other types of debt that either spouse may have. The prenup should outline who will be responsible for paying off these debts after separation.
• Property – Property clauses are very common in Prenups. Whether that is establishing what is to happen to the marital home or if one spouse wishes to keep a property they own separately.
• Maintenance – Addressing spousal and children support including whether or not it will be settled and the amount of aid given is worth including in a prenup.
• Pensions – What is to happen to any pension pots? Define within your agreement what happens to held pension pots upon separation.
• Inheritance – If you or your spouse are due to inherit money, a clause can be inserted to ensure this stays with the desired party. Inheritance can also be left to children.
• Personal Property – Art, jewelry, etc. Personal property or belongings can be kept with the owner and not shared with their husband or wife.
• Bank accounts – Prenuptial agreements can address joint bank accounts and how these will be handled in case of separation. Parties can also use a nuptial agreement to protect their income or savings.
• Business interests – A prenup can include provisions for the division of business assets and restrictions on the sale or transfer of those assets.

If you cover anything outside of financial matters in your prenup, a Judge may decide not to consider it.

This means that your prenuptial agreement cannot include decisions around child support or child custody, lifestyle matters, and outlining domestic duties.

Final Thoughts

Think of a prenup as an insurance policy. We buy insurance for our health and holidays; why? Not because you want or think things will go wrong, but to protect ourselves should the worst happen.

Since the groundbreaking 2010 case, UK courts have been more inclined to uphold prenups that meet the legal requirements.

Ultimately, prenups allow you personal autonomy over your money and assets. Failing this, it could be left up to a Judge to decide who gets what.

More couples are getting prenups before marriage than ever before, and with Divorce-Online, it’s easier and more affordable than you thought.