Pre-nuptial agreements: The first sign of the wedding season
The wedding season will soon be upon us. Although this is an exciting time for the husbands and wives to be and their families, financial security is an important consideration. With this on the mind, it seems that there is now a flurry of activity for family lawyers in drafting pre-nuptial agreements in the late Spring / early Summer.
Where previously pre-nuptial agreements may have been thought of as being reserved for the rich and famous, there has been a notable rise in awareness of the benefits of pre-nuptial agreements to the general public. Pre-nuptial and /or post-nuptial agreements can be used as a tool to provide more clarity and reassurance to couples, so that they have more certainty about how their finances would be treated if they were to divorce, annul their marriage or separate.
A factor which adds significant weight to a pre-nuptial agreement is whether it was completed in plenty of time before the wedding. This is to ensure that the parties are freely and voluntarily entering into the agreement without feeling pressurised. The recommended guidance now suggests that an agreement should be signed 28 days before the wedding day, although in reality the sooner the better.
A soon-to-be spouse who has been married previously may be more wary than a person entering into their first marriage, and may want to protect the financial interests of their children from a previous relationship. Other common reasons for entering into this type of agreement include the parties' desire to protect inherited wealth or wealth generated from their endeavours prior to the marriage.
Formalising the parties' intentions into a pre or post nuptial agreement provides the parties with a clear, cost-effective arrangement in place if the worst were to happen and the relationship was to breakdown. In the absence of an agreement, the parties will be reliant on the current law to dictate how their assets will be divided in the event of a divorce. A pre or post nuptial agreement reduces the risk of future litigation. There is more scope for autonomy by entering into this type of agreement compared to relying on the more paternalistic approach that would be taken by the Court and the more vague 'parameters of settlement' that would otherwise be debated in solicitor-led negotiations or at mediation.
Even with solicitors taking a constructive and non-confrontational approach to negotiating the terms of an agreement, there can often be extensive discussions about the content. This can take longer than either party might have anticipated before seeking advice. By allowing plenty of time to consider the pre-nuptial agreement (and to sign it before the deadline), the bride and groom can enjoy preparing for their 'big day', safe in the knowledge that they have financial clarity upon entering into their marriage.