Pre-Nuptial Agreements

A pre-nuptial agreement, is a formal, written agreement between two partners prior to their marriage. It sets out clearly how their finances are to be dealt in the event of divorce. The intention is to have clarity about what it is they intend in the event of a future divorce in order for them to make it clear from the outset what has been agreed between them therefore trying to remove any uncertainty in the future.

A pre-nuptial agreement must be well though through and there are various factors that have to be considered and information provided. The tendency is to think that such agreements can simply record what the parties agree without detailed thought or advice. That is incorrect, they require a lot of planning, exchange of information, and sometimes expert advice, usually around tax. There can also be cross jurisdictional issues which can be a further complication, as that might require separate advice from a lawyer in that jurisdiction.

Pre-nuptial agreements are often popular where there is a second marriage and the parties are seeking to preserve wealth for their respective children. Similarly, parents can quite often be interested in making sure that these agreements are entered into if children have already been given funds by them, or are beneficiaries of an existing trust.

There is also a misconception that such agreements are binding on courts here, they are not. They are a factor to be considered. Over time more weight has been attached to them as the courts look to respect the autonomy of parties in their own decision making. 

That said, there are strict guidelines which attach to the credibility of such agreements;

• There must be no undue influence, duress, fraud or misrepresentation.
• The agreement is signed 28 days before the wedding day;
• The couple must have obtained independent legal advice at the time they entered into the agreement;
• The couple should disclose to one another full details regarding their financial circumstances;
• Both parties’ needs must be met, ie by implementing the terms of the agreement, both parties must be able to meet their reasonable needs viewed within the context of the marriage.