In England and Wales, there are no rigid rules on how assets should be divided during divorce.
In many cases, both partners are typically entitled to 50% of the matrimonial assets during the early stages of a financial settlement – regardless of what each partner brought to the table before marriage. But, a prenuptial agreement can help ensure that assets are divided fairly in the event of a divorce.
And, with figures from the Ministry of Justice showing t hat more than 24,000 divorce orders were made in the UK during Q1 2023 – an increase of 15% compared to the same quarter in 2022 – it’s important to understand your financial rights before getting married.
So, what is a prenuptial agreement, why would you need one and what do they protect? We answer these questions and more below.
What is a prenuptial agreement?
A prenuptial agreement, sometimes shortened to prenup, is a legal agreement that a couple makes before they marry, which outlines how their assets should be divided if their marriage fails or if one partner dies. This agreement is made in the form of a legal document drawn up with the help of a solicitor.
Why would you need a prenup?
Prenuptial agreements can be used for many reasons, but are typically drawn up to protect your personal assets that you take with you when entering a marriage. They were traditionally used by high-profile celebrities to protect their wealth in case of divorce, and still are to this day. However, a prenup can benefit all couples by safeguarding their futures.
The major benefit of a prenup is that it protects both partners’ assets in the event of the breakdown of a relationship. While the conditions for creating a prenup are critical, the idea is that both partners can agree on how their assets are divided beforehand, meaning that both parties will feel that the distribution is fair and equitable.
Throughout a marriage, a prenup can give both partners a sense of financial security in their relationship. And, if this relationship should break down, a prenup can help reduce the time and effort that goes into deciding who is entitled to what. This agreement can often result in less conflict, expense and delay in the divorce proceedings.
What does a prenup include?
Prenuptial agreements are tailored to the unique circumstances and needs of the couple. So, they can be put in place to protect a wide range of assets, including:
- Properties you and your partner own together or individually
- Savings and investments
- Inheritances and family trusts
- Items of sentimental value
- Child maintenance
- Pension pots
A prenuptial agreement contains an inventory of all the assets of each partner and explains how they should be looked after or divided should the relationship break down. If there are any assets that you don’t want to be divided, then the prenuptial agreement can specify this too.
Why should I choose to sign a prenup?
Prenuptial agreements can be a complex and sensitive subject, but it’s worth discussing if both you and your partner want to protect your personal belongings. Seeking legal advice from friendly and knowledgeable family lawyers can help encourage an open conversation between you and your partner, understanding how best to manage your assets before the big day comes around.