Prenuptial Agreements in the UK - Are they Legal?

Prenuptial Agreements in the UK - Are they Legal?

Prenuptial agreements, or ‘prenups’, are legal documents that couples can use before marriage to outline how their financial assets will be divided in the event of a divorce. While they are not strictly legally binding under UK law, the courts increasingly recognise prenups and will take them into serious consideration during divorce proceedings. In some circumstances, a prenup can even have a significant influence on the court’s decision, provided it meets certain conditions.

The Law Commission's 2014 report, "Matrimonial Property, Needs and Agreements", suggested that prenups should be legally enforceable under specific circumstances. For example, both parties must have received independent legal advice, disclosed their financial situation fully, and entered into the agreement freely and willingly. Additionally, the agreement must be made at least 28 days before the wedding. As things stand, although prenups are not entirely legally binding, they are more likely to be enforced by the courts than in previous years.

What Does Having a Prenup Mean?

Having a prenuptial agreement means that a couple has taken the proactive step to outline how their assets, liabilities, and other financial matters will be managed should their marriage come to an end. Typically, these agreements address the division of property, savings, investments, business assets, and even pensions. Prenups are particularly valuable for individuals entering a second marriage, or those with significant personal assets, such as business owners or beneficiaries of large inheritances.

As family law expert and partner at Irwin Mitchell, Kate Butler, states, “A prenup gives clarity and certainty around financial matters should the relationship break down, allowing both parties to have a say in the division of assets rather than leaving it up to the courts.”

A prenup can also safeguard children from a previous marriage by specifying inheritance or assets intended for their benefit, ensuring that the wealth remains within their family line. Additionally, couples may choose to protect future inheritances or assets acquired after the marriage, should the relationship dissolve.

Is a Prenup a Red Flag?

One of the most common questions surrounding prenuptial agreements is whether asking for one could be a sign of an underlying issue in the relationship. Some view it as a lack of trust or as preparing for failure before the marriage has even begun. However, in reality, a prenup can be a practical, rather than a negative, step.

As family lawyer Ayesha Vardag, founder of Vardags, explains, “A prenup is not an indication of a lack of trust, but rather a demonstration of financial clarity and maturity. By having open discussions about money before marriage, couples are protecting both their financial interests and the stability of their relationship in the future.”

Rather than a red flag, a prenup can be seen as a means of preventing financial disputes down the line. It allows both parties to have clear expectations about how assets and finances will be handled, which could reduce the possibility of conflict in the event of a separation.

How Much Does a Prenup Cost in the UK?

The cost of a prenuptial agreement in the UK can vary significantly depending on the complexity of the agreement and the assets involved. A straightforward prenup with a basic division of assets may cost a few hundred pounds, while a more detailed and tailored agreement could run into thousands of pounds.

For instance, as noted by Slater and Gordon family lawyer, Nicola Horne, “The cost of a prenup depends largely on the complexity of the couple’s financial situation and the level of detail required. Generally, legal fees for drafting a prenup start at around £1,000, but for couples with significant assets or business interests, this could be considerably higher.”

While the price tag may seem steep, many lawyers emphasise that it can be a worthwhile investment. After all, a prenup can help avoid expensive and prolonged court battles later on in the event of a divorce. It is also important to remember that both parties must seek independent legal advice to ensure the agreement is fair and legally valid, which adds to the cost.

What Can Be Protected with a Prenup?

A prenup allows individuals to protect a range of assets and financial interests. Common items that are typically included in prenuptial agreements are:

• Assets owned before marriage: Property, savings, and investments that were acquired prior to marriage can be protected in a prenup.
• Inheritance: Future inheritances or those already received can be safeguarded, ensuring they are not divided in the event of a divorce.
• Business assets: If one partner owns a business, a prenup can help prevent the business from being divided or losing its value in the event of a divorce.
• Children’s inheritance: For those with children from a previous marriage, a prenup can help ensure that specific assets are passed on to them, rather than being considered joint assets that could be divided during a divorce.

What Cannot Be Included in a Prenup?

While prenuptial agreements can cover a broad spectrum of financial matters, there are several aspects that cannot be included. These include:

• Child custody arrangements: A prenup cannot dictate who will have custody of the children or other aspects of their upbringing, such as schooling or religious practices.
• Child support: The agreement cannot set out arrangements for child maintenance or other support obligations.
• Personal matters: Issues such as lifestyle choices, preferences, or personal obligations cannot be included in the prenup.
• Unfair or illegal clauses: Any provisions that are deemed to be unfair, illegal, or contrary to public policy will be disregarded by the courts.

How Long Does a Prenuptial Agreement Last?

A prenuptial agreement typically lasts for the duration of the marriage. However, if circumstances change during the marriage, such as significant financial changes or the birth of children, a couple may choose to amend the agreement through a postnuptial agreement. It is also important to note that a prenup may not be enforced by the courts if it is deemed unfair or if the financial circumstances of one party have dramatically changed.

In the UK, while prenuptial agreements are not yet fully legally binding, they are gaining recognition and are increasingly considered by the courts in the event of a divorce. Prenups are not a sign of distrust but rather a way for couples to clarify their financial arrangements and protect their assets. Although the cost of a prenup can vary, it is an investment that may save significant costs and emotional strain should a marriage end. As the law evolves, it is likely that prenuptial agreements will continue to gain in importance and legal enforceability.

If you’re considering a prenup, it is vital to seek expert legal advice from a family law professional, such as those at Irwin Mitchell or Vardags, who can tailor the agreement to your specific needs and ensure that it complies with all legal requirements.