It always pays to think about the future when you’re getting married. Whilst there’s nothing wrong with looking ahead to a happy life together with your spouse, there’s also the possibility that you’ll divorce at some point in the future, with over 100,000 couples having done so in 2020.
Because of statistics like these, the number of people considering a prenuptial agreement is rising. Here we’re looking at the benefits of prenuptial agreements and why they should be regarded as smart financial planning.
Protect your assets
A common misconception about prenuptial agreements is that they’re only for the wealthy. You don’t need to have a massive property portfolio, a long line of successful businesses or multi-millions in the bank for a prenuptial agreement to be of benefit.
It might be that you bought a property before entering into your relationship. Perhaps you’ve already inherited money or property from a family member. Maybe you’ve been married before and have the proceeds of a financial settlement. Whatever your circumstances, considering how to protect what’s ‘yours’ in the event of a divorce is a worthwhile exercise, particularly if you have children from a previous relationship.
A prenuptial agreement outlines who will take ownership of any property, businesses or capital should the marriage end in divorce, making the whole process far less complex.
Avoid financial difficulties
A prenuptial agreement can cover more than just property and money. What if you and your partner have any debt? A prenuptial agreement won’t only dictate how things are to split in the event of a divorce, it will also cover who’s responsible for what when it comes to the liabilities.
That way, you’ll both be protected from taking responsibility for any debt that isn’t yours and any resulting financial difficulty that this could cause.
Encourages honesty and openness
There’s nothing quite like a prenuptial agreement to start a marriage on an honest footing. Open and honest communication is one of the key foundations of a strong, not to mention happy, marriage.
It’s realistic to prepare for the worst. Ultimately, a prenuptial agreement is just sound financial planning. Just as you might have a savings account to help you out if you’re struggling or take out life insurance to ensure that everyone is protected, it’s a smart move to put plans in place to ensure all bases are covered in the event of divorce.
Avoids rash decisions
Complex and heightened emotions surround both marriage and divorce. When you marry, it’s easy to think only with your heart, wanting to share everything with your partner as you embark on your life together. However, if you do divorce at some point down the line, chances are that you’ll feel very differently.
Similarly, negative emotions can take over during a divorce, making it difficult to see the wood for the trees. Many clients are tempted to make rash decisions in the heat of the moment without giving enough thought to what will work for them in the longer term.
With a prenuptial agreement, you can take the time you need to figure out your options and what’s going to be a fair outcome for you and your spouse if divorce becomes a reality. As long as you both agree, and have taken independent expert legal advice, the scope for disagreement is significantly reduced.
Whilst prenuptial agreements are not legally binding in the UK, they are very persuasive provided they are entered into properly. Your solicitor can ensure that the requirements are met to maximise the likelihood of it being followed. This means that the chance of protracted negotiations and contentious court proceedings is significantly reduced.
However, both you and your future spouse must seek independent legal advice and have regular reviews if the agreement is to have the best chance of success and overcoming any challenge.
If you didn’t opt for a prenuptial agreement before your marriage, it’s not too late. A postnuptial agreement can be entered into at any time during your marriage to set out a fair and workable outcome should you divorce. It’s always better to agree on things whilst the relationship is in a good place, as opposed to when things turn sour.
If you’d like to discuss this in more detail, you can always get in touch, and we’ll be happy to help.
If you’re not married and don’t plan to be, you can decide how assets and finances will be divided in the event of a separation through a cohabitation agreement. Contrary to popular belief, there is no such thing as a common law spouse, and unmarried couples simply don’t have the same protection afforded to married couples.
Again, should you wish to talk through your options here, particularly if you’re thinking of buying a property with your partner, we’ve got the expert advice and guidance that you need.
If you’re looking to draft up a prenuptial, post-nuptial or cohabitation agreement, Harrogate Family Law is here to support you. Our team of expert family lawyers will always put your needs first and work to get you the fairest deal possible in the event of a divorce or separation.