Five Essential Facts You Need to Know About Pre-Nups
Taking the plunge and deciding to get married is often one of the happiest times in many people’s lives. After all, it is a chance for couples to reflect on their journey so far and look optimistically to a bright future.
When you’re in that situation, the idea of spoiling the romance by even entertaining the idea of what would happen if it all went wrong might seem strange. However, using a pre-nuptial agreement to put some plans in place for the future can be hugely beneficial and will ensure you both know where you stand if the worst does happen.
With pre-nups expected to become even more important after the expected introduction of no-fault divorce laws in the Divorce, Separation and Dissolution Bill later this year, Irwin Mitchell family law partner Zahra Pabani has set about busting some myths and providing some key facts on these documents.
1. They are not legally binding
A pre-nup establishes how income or assets could be divided if a relationship was to breakdown. However, one thing you may not realise is that they are not actually legally binding documents.
Zahra explains: “That is true, but it is also true that they are carefully considered by judges as they decide how assets should be split during the divorce process. As long as the couple have received independent legal advice and the document has been properly drafted in the correct manner, judges will try to uphold them.”
2. They’re for everyone
One of the classic misconceptions that has affected discussion and debate about pre-nups through the years is the idea that they are purely something that those with some serious money have to consider.
However, Zahra explains: “Put simply, the agreements are useful for anyone with any assets or something that they want to protect in the event that a relationship goes sour. For example, think about what may happen to a house or a pension if things happen to go wrong.”
3. You can get one even if you’re already married
Considering they’re called pre-nups, you would be forgiven for thinking that you might have missed the boat on putting one in place if you’re already married. However, that is not actually the case, as you can opt for a ‘post-nup’ agreement instead.
Zahra said: “It’s never too late to think about how you might want assets or income to be divided, particularly when you consider how a couple’s financial situation may change during the course of a relationship. Protecting key assets is vital whether you’re preparing to tie the knot or are approaching a 25th wedding anniversary.”
4. You can use them to protect a range of assets
You might just think that a pre-nup can help in terms of deciding how specific finances will be divided in the event of a divorce, but they can basically be used to protect a range of different assets depending on what you have.
Zahra outlines: “The assets involved in a relationship can vary from couple to couple. For instance, in one situation there may be a family business that has to be considered, while in another there may be a portfolio of properties that could come under the microscope. In another scenario, there could be a big inheritance for a child that needs to be ring-fenced. For the most part, any assets can potentially be protected using a pre-nup.”
5. They are particularly useful when remarrying
Modern families come in all shapes and sizes these days and the rise of second or even third marriages can create some complex arrangements. Fortunately, as Zahra explains, pre-nups can go a long way towards providing clarity on how financial issues should be dealt with.
“The agreements can have an impact in a variety of ways,” she said. “They can help protect inheritances for any children, particularly where there may be young people from other relationships involved too. Furthermore, they can be used as part of inheritance planning, such as when gifts are made to other parties or trusts have been set up.”