Love is in the air
Valentine’s Day is upon us; supposedly one of the most romantic days of the year. We are also in a Leap Year – according to an old Irish Legend, this is the day when women can propose to men. February may, therefore, lead to more engagements and plans to marry than other times of the year.
Whilst it may not seem the most romantic thing to do, increasingly, betrothed couples are taking a grown-up approach to their financial position and are signing a Pre-nuptial Agreement before they get married. This was highlighted on the BBC1 series The Split which was back on our screens this week. It’s not all about prenups though. It is also possible to sign an agreement after you get married (called a Post-nuptial Agreement). It’s still signed at a time after the marriage, but whilst relations are good rather than after a split.
Pre nups are not just for the filthy rich. They can be suitable in cases where the assets are much more modest.
Why sign a prenup?
In our experience, prenups aren’t signed because one or both people think their marriage is doomed to failure. People sign up to them for all sorts of reasons but often it may be a second marriage and they don’t want the pain of expensive litigation should things go wrong. Alternatively, they may just want to sort things out when relations are good and not when they may have turned sour. It may feel unromantic, but a fairly agreed prenup is a pragmatic way of ensuring that there is a plan in the event that the relationship sadly breaks down.
Are they legally binding?
Contrary to popular belief, prenups are not legally binding. However, since the Supreme Court Case of Radmacher -v- Granatino, the Supreme Court has confirmed fairly contracted prenups won’t be set aside.
What is a fairly contracted agreement?
The agreement must be procedurally fair. There can’t be any undue pressure by one party or the other. There should be openness at the time the agreement is reached and each party should disclose their financial information to the other party. There must be an opportunity for each party to seek legal advice and it must not be made too close to a marriage date. The agreement should also be substantively fair and provide for the basic needs of a divorcing husband or wife.
A prenup does not have to be binding forever. Clauses can be inserted to enable the agreement to be reviewed either on a regular basis or in the event that one of the parties suffers ill health or a child is born.
Prenups and postnups may not conjure up red roses and champagne, but they can prevent expense and aggravation further down the line.