On the February 27, 2014 the Law Commission will announce proposals to the Government about the law governing pre-nuptial agreements.
The proposals follow a long period of consultation and many believe the Law Commission will act in favour of pre-nuptial agreements and make them legally binding, revolutionising the law surrounding separation and divorce.
Family law expert, David Connor explains the pros and cons of pre-nuptial agreements.
Currently such agreements are not always upheld in a court of law and the changes mean that more than 250,000 engaged couples a year will be able to agree how their assets will be split should their marriage end. Couples will also be able to ‘ring-fence’ certain property or gifts to prevent them from being shared with their partner in the eventuality that they divorce.
Counter to belief, pre-nuptial agreements aren’t just for the rich and famous. They allow couples to set out what should happen to their assets and what maintenance should be paid in the event that the relationship breaks down and they separate. It can also include agreements in relation to any children of the relationship.
If you’re thinking about making a prenuptial agreement, it can be helpful to look at the most common advantages and associated challenges.
Advantages:
• Clarify and protect your assets
• Identify ownership of property.
• Agree how your finances will be divided if you later divorce, avoiding complex divorces and saving time and money.
• If your partner has significant debts, a pre-nuptial agreement can help ensure your assets are protected from satisfying those debts if you later separate.
• Ring-fence assets to ensure children from a previous marriage are cared for.
• Establish procedures and ground rules for deciding future matters.
• Prevent disruption to your business or business partners by stipulating private/family owned business as an asset.
• A commitment from both parties on the signing of a prenuptial agreement can help alleviate any concerns that your partner is marrying you for your money.
Disadvantages:
• These types of agreements can make one party financially and economically vulnerable.
• A request for a pre-nuptial can upset both the person involved and the wider family, raising trust issues.
• Most people will find the whole concept of planning for failure unromantic.
• Changes in circumstances may occur and so often the agreement loses its relevance, particularly with younger couples who may not plan for children or a change in assets.
• If a party waivers inheritance rights and his or her spouse dies while still married he or she may be in a precarious financial position.
• The choice of law clause can be ineffective if you choose to carry out any separation or divorce procedures in another country.
• The rules are still unclear and a prenuptial agreement may not be legally binding if you have not followed specialist legal advice.
Those wishing to consider a pre-nuptial agreement are advised to contact a family law expert, let our experience make yours that much easier. For further information contact David Connor at Woodcocks Haworth and Nuttall on 01706 225621 or email david.connor@whnsolicitors.co.uk
