Are Pre-nups Just for Celebrities?
Pre-Marital Agreements, or ‘pre-nups’ are becoming increasingly common for two reasons. Firstly, they are helpful for individuals who are marrying for a second time and wish to protect their assets for their children. Secondly, they are helpful where there is an imbalance of wealth between the couple, such as where they have inherited assets.
This is because on divorce all assets which belong to the couple will form a ‘pot’ which is available for distribution on divorce. The court will take account of various factors, such as the length of the marriage, the couple’s needs, assets, earning capacities, income and contributions; but as the court has a wide discretion when distributing assets on divorce, there is no guarantee of what the outcome will be.
The Supreme Court has held that ‘the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold parties to the agreement’. Therefore, so long as it is not unfair to do so, the court will hold a couple to their pre-nup on divorce.
Whilst a person may be reluctant to suggest a pre-nup to their spouse-to-be for fear of being seen as unromantic, it is a sad reality that almost half of all marriages end in divorce.
It is usually sensible to think of pre-nups like a house insurance policy – no one wants their house to burn down, but it is sensible to be protected in case it does.