Your guide to creating a binding
prenuptial agreement
Prenups are nothing new, they have been around
for a long time and in many parts of the world are
quite commonplace. In the UK, Scottish Widows
conducted research which suggested that 56%
of those yet to be married would consider a
prenuptial agreement.
1
Why you need a prenup
Unfortunately, not every marriage survives. Sadly, figures from the Office of National
Statistics (ONS) show that 42% of marriages in England and Wales end in divorce.
34% of marriages are expected to end in divorce by the 20th wedding anniversary.
2
You will regularly see media coverage commenting on celebrities who have chosen to
have a prenup and those who have decided against. It’s reported for example that Britney
Spears (worth an estimated $120) gave a mere $1m to dancer Kevin Federline in their
divorce, after ensuring a watertight prenup. In contrast Sir Paul McCartney’s decision, not
to have a prenup, with his then wife Heather Mills, is reported to have cost him £24.3m.
3
42% of marriages
end in divorce
What is a prenuptial agreement?
A prenuptial agreement (more commonly referred to by the public as a prenup) is
a document prepared by a couple to set out their wishes should their relationship
breakdown. The agreement will primarily consider financial matters.
Prenups in the UK
Prenuptial agreements are not very common in the UK at present. This may be because
they have historically not been considered legal binding. However, in 2010 a Supreme
Court case (Radmacher v Granatino) indicated that in the ‘right case’ a prenup would
have decisive weight in a divorce settlement.
Whilst many divorces that we deal with at Woolley & Co, Solicitors are dealt with
amicably (and therefore cheaply) you do hear horror stories about ordinary couples
spending tens of thousands of pounds in legal fees trying to reach agreement about their
finances when they divorce. In a report in The Telegraph (The Hidden Costs of Divorce
4
)
they quote an average spend of £44,000.
Creating a water tight prenuptial agreement minimises the
likelihood that you will suffer this kind of financial cost.
‘Average spend of
£44,000’
The Telegraph
The Hidden Costs of Divorce
Are WE in
AGREEMENT?
To make sure you create a binding prenup you
must address these five points:
1.
The prenuptial agreement is entered into freely
The agreement should be entered into of both parties’ free will, without any undue
pressure from each other or a third party.
The agreement should be negotiated as far in advance of the wedding as possible, and
finalised at least 28 days before the wedding.
The court will consider individual circumstances such as you and your partner’s age,
maturity, previous experience of long-term relationships as well as both of your
emotional states at the time of the agreement.
To be upheld by the Courts
a prenuptial agreement
needs to be prepared in a
particular way.
Creating a water-tight agreement
If you are thinking about a prenup, there
are some important things you need to
know. Whilst prenuptial agreements are
not absolutely binding on a divorce court,
recent case law has determined that
where they have been properly set up
they carry very significant weight.
3. The agreement is fair
The agreement will be considered to be unfair:
• if it fails to meet the reasonable requirements of any children.
• if it left one of you with less than you need, while the other is comfortably
provided for.
• if there is a fundamental and unforeseen change in circumstances, such as one of
you losing all your money or becoming severely disabled.
• if one of you has a strong argument for an element of compensation (for example,
for loss of earnings after a joint decision to give up a career to care for the family),
then a prenuptial agreement that ignores that element of compensation may be
considered unfair.
2. The implications of the agreement are fully understood
You should be in possession of all the information material to deciding to enter into an
agreement before signing it. And you should both receive specialist family law advice on
the terms and implications of the agreement.
4. The agreement accounts for your children
The agreement must ensure that appropriate financial provision is made for any children
that you have together, whether at the time the agreement was created or children you
may have during the course of your marriage.
1
Scottish Widows research 2009
2
ONS data report – What proportion of marriages end in divorce http://webarchive.nationalarchives.gov.uk/20160105160709/http:/www.ons.gov.uk/ons/rel/vsob1/
divorces-in-england-and-wales/2011/sty-what-percentage-of-marriages-end-in-divorce.html
3
https://www.supremecourt.uk/docs/prenuptial-agreement-debate-pack.pptx
4
http://www.telegraph.co.uk/women/sex/divorce/11041341/The-hidden-cost-of-divorce.html
5. There are arrangements for regular reviews
The longer a marriage lasts, the greater the chance that it may not be fair to hold the
couple to the terms of an agreement. It is therefore sensible to commit to regular reviews
of your prenuptial agreement and update it if circumstances have changed (for example
after the birth of a child, sale of your company, redundancy or inheritance).
Prenuptial agreements are becoming increasingly popular, with the high proportion of
second marriages and couples coming into relationships with assets of their own. Getting
a prenup makes a lot of sense, but it is really important to take advice from a specialist
family lawyer and make sure the agreement is drawn up correctly and you are advised
throughout the process.
Woolley & Co, Solicitors, Silverstone House,
Kineton Road, Gaydon, Warwick, CV35 0EP
Woolley & Co Solicitors is the trading name of Woolley & Co Limited, company number 07387222. Woolley & Co is a member of the Law Society and authorised and regulated
by the Solicitors Regulation Authority. A list of directors is available from our registered office which is Silverstone House, Kineton Road, Gaydon, Warwick, CV35 0EP.
Take advantage of a free initial chat with one
of our lawyers to discuss your circumstances.
Call 0800 321 3832 or book online
at www.family-lawfirm.co.uk
Legal advice
Woolley & Co can help by
• offering initial advice on the merits of a prenuptial agreement
and explaining their legal status;
• preparing a prenup;
• advising on the implications of a prenup drafted by a 3rd party;
• reviewing and updating prenups when circumstances change.
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