To have and to hold on to?
Are pre-nuptial agreements ‘unromantic’ or a saviour from financial and emotional costs?
The question of whether couples should consider entering into a pre-nuptial agreement (pre-nup) before marriage seems to be on everyone’s mind lately. The latest high profile splits of Jenson Button and his wife Jessica Michibata, or Cheryl Fernandez-Versini and her husband Jean-Bernard add fuel to this hot topic as we learn that neither Jenson or Cheryl opted for a pre-nup prior to their respective weddings.
When dividing matrimonial assets upon divorce the starting point is that of equality. The Court will focus on the guiding principles of ‘equal sharing’, the ‘needs’ of the respective spouses (and dependants if there are any), and ‘compensation’. The notion that the assets one spouse may have acquired prior to the marriage could be lost in a divorce is an unwelcome thought for many, particularly if these assets have arisen as a result of pre-marriage investments, family inheritances, or where there are children from previous relationships whom one spouse may want to provide for in years to come.
What is a pre-nup?
A pre-nup is a legal agreement made between two individuals before their marriage has taken place which allows a couple to set out how they would wish their assets to be dealt with in the event they later divorce. The existence of a pre-nup enables each individual to clearly identify ‘joint property’ and ‘separate property’ within the agreement.
Once the assets are identified in this way, each individual can, amongst other things, clarify exactly how the ‘joint’ and ‘separate’ property should be dealt with both during the marriage and in the event the marriage breaks down. For example, assets owned by either individual prior to the relationship could be identified as ‘separate property’ with provisions within the pre-nup for them to remain ‘separate’ in the event of a divorce.
This may seem an unromantic approach but in recent years there has been a real shift in the way in which pre-nups are regarded and their existence can prove to be highly practical when needed, often avoiding costly and emotional court proceedings.
For more information please contact Gail Brooks, Associate, Private Client - Family.
Published: 11 Feb 2016