Q: What is a Pre-Nuptial Agreement?
A Pre-Nuptial Agreement (PNA), is a written agreement entered into between a couple prior to their marriage. It outlines how parties intend to deal with their financial arrangements in the event of a divorce.
Q: What can be included in it?
The PNA will be tailored specifically to you as a couple, and it can include a variety of financial provisions. Usually, they cover the distribution of assets such as the matrimonial home, other properties, business interests, pensions and debts. They can also provide for lump sum payments and financial support such as spousal or child maintenance. However, there are certain things that shouldn’t be included, for example child arrangements or expectations for your relationship.
Q: Can you sign a PNA after marriage?
Your PNA should be signed at least 28 days before your wedding so that potential undue pressure is minimised. However, if there is insufficient time you can enter into a similar agreement after marriage, called a Post-Nuptial Agreement. You can also enter into a Post-Nuptial agreement at any time during your marriage should the need arise, for example due to a change in financial circumstances.
Q: Do PNAs expire?
PNAs do not expire as such as they are designed to run for the duration of the parties’ marriage. However, they can become out of date and therefore ineffective. For that reason, you should include a review provision every few years or on the occurrence of a specific event, such as the birth of a child or inability to work. This enables the parties to review and update the agreement if necessary. We recommend that all nuptial agreements are regularly reviewed to ensure that they remain fair, meet needs and reflect the parties’ wishes for the duration of the marriage.
Q: Are they legally binding?
PNAs are not legally binding as such, but they will usually be upheld by the courts if certain requirements are met. Those are:
- Both parties have received independent legal advice
- There has been an exchange of material financial disclosure
- Both parties entered into the agreement freely and voluntarily, with full understanding of its implications.
- The agreement is validly executed and signed by both parties. For PNAs, this should be done at least 28 days before marriage
- The provisions of the agreement are fair and meet the needs of the parties and any children.
Q: Can a PNA be challenged?
If the agreement meets the above requirements, it is likely to be upheld by the court. However, it can still be challenged. The court has the power to depart from a PNA and is likely to do so particularly if it is unfair and the needs of one party are not met as a result.
Q: Why should I consider a PNA? What are the advantages and why should I ringfence my assets?
PNAs can be an excellent tool as they provide clarity from the outset and give couples the freedom to make their own decisions as to how finances will be managed. They can also help avoid conflict and minimise legal costs in the event of separation. PNAs are particularly appealing if a party is in a stronger financial position already or is likely to be due to prospective inheritances or family wealth. They are also useful where a party has pre-acquired assets which they wish to protect by ringfencing them from joint assets which might otherwise be shared.
