Pre-nuptial agreements
Pre-nuptial agreements, commonly known as ‘pre-nups’ are entered into by parties who seek to set out and allocate what is each of theirs to keep, should there be the unfortunate breakdown of their marriage or civil partnership in the future.
Nowadays marriage or civil partnership usually comes following a period of living together, where parties may have purchased property often contributing in unequal shares. Pre-nuptial agreements therefore offer a way to set out what the parties’ intentions were going into the marriage or civil partnership and what should happen to joint finances upon the breakdown of the relationship.
How do I enter into a pre-nuptial agreement?
Pre-nuptial agreements must be entered into freely, without pressure from any outside forces and after both parties have had the opportunity to obtain separate, independent legal advice. The parties to the agreement must have had full disclosure of all assets and liabilities held by each other and fully understand the implications of entering into the agreement. The agreement must also be fair to hold the parties to. Pre-nuptial agreements can specify what will happen to possessions as well as finances and can set out the parties’ intentions on how finances will be sorted should they have children in the future.
The pre-nuptial agreement must also be entered into by the parties at least 21 days before the date they are to marry or enter their civil partnership. Case law varies on the exact timings, however, a time frame of between 21 to 42 days before the ceremony has been mooted. In essence, the longer the period between both signing the agreement and the ceremony taking place the better.
Are pre-nuptial agreements legally binding?
If the above is done correctly, then the Court can take into consideration the parties’ intentions as set out in a valid pre-nuptial agreement. However, it is of importance to note that it is up to the Court to decide if and to what degree they will enforce a pre-nuptial agreement, with specific consideration of the s25 Matrimonial Causes Act 1973 and specifically the needs of the parties.
Furthermore, the weight that the Court will attach to the agreement will be different in each case and if there are any children from the marriage, the children’s needs will be looked at as the top priority over all other factors.
If the effect of enforcing the pre-nuptial agreement would be to leave one party with less than they need, while the other party is comfortably provided for, then this is likely to be unfair and the Court is likely to deviate from the agreement. It is also of note that the longer the marriage or civil partnership the more questions the Court will have over the fairness to rely on the pre-nup.
Post-nuptial agreements
Post-nuptial agreements, or ‘post-nups’ are entered into once the couple are married or in a civil partnership. This can sometimes be the case where there was not sufficient time between obtaining advice about a pre-nup and the date of the ceremony, given that parties should not enter into a pre-nup too close to the big day (as set out above).
The agreement is used to set out who would get what if the couple should ever separate. The Court is very clear that in order for the post-nup to be a valid agreement that parties can seek to rely upon, then it must be freely entered into, parties must have a full appreciation of the implications of the agreement, and it must be fair to hold the parties to the agreement in the circumstances prevailing.
This means that should parties later separate, the Court will have to regard the post-nuptial agreement, but it is up to the Court to have regard to all the circumstances, and the key legislation of section 25 of Matrimonial Causes Act 1973 which obliges a Judge to consider such, including the needs of any children to the marriage before it will make any decision about sorting the parties’ finances. It is a must that both parties have had the opportunity to obtain separate legal advice and have not been pressurized into signing the agreement.
Cohabitation Agreements
Cohabitation agreements are usually entered into by couples who wish to move in together, but who do not have any intention to marry soon or at all.
Unmarried cohabiting families are one of the fastest growing type of families in the UK and many cohabitees do not realise that compared to married couples, unmarried cohabitees are nowhere near as protected by the law – there is no such thing as a ‘common law marriage’.
What does a cohabitation agreement include?
Cohabitation agreements help to set out clearly what each party brings to their new lives together and can help to set in place who pays for what bills/mortgage or rent payments and whether parties agree as to whether either or both will gain any interest in a purchased property by contributions towards the home. The agreement can also set out future plans as to what happens if there are children later on in the relationship, what happens to beloved pets or the parties’ finances should they later split up.
Cohabitation agreements can be sought by any cohabitees – i.e. friends buying a property together, as there is no requirement that the agreement can only be made by those in a relationship.
Separation Agreements
When parties to a marriage break up, and they do not wish to formally divorce or dissolve their civil partnership, but are seeking to separate their finances formally, then a separation agreement can be drawn up to set out clearly the parties’ intention to distinguish and regulate their joint finances moving forward.
Separation agreements should address how it has been agreed that the parties will continue to meet the needs of any children of the family, as well as what has been agreed in terms of the division of assets held. It should also consider and set out material facts such as the parties’ incomes and each of their pension rights, addressing these both now and in the future.
What are the benefits and drawbacks of separation agreements?
An advantage to having a separation agreement is that it can cover a wider variety of items compared to financial orders, such as a direction for one party to pay for any repairs on the family home if the other spouse remains living in it. The disadvantage, however, is that unlike with financial Orders, there is no ‘clean break’ between the couple and their finances. This then means that in the future financial claims could be made by one of the parties against the other.
There is also uncertainty as to the weight that the Court will attach to a separation agreement, with much depending on the individual facts of each particular case and the parties’ needs, which means future claims could be made.
If you need advice about your relationship, including making a pre-nuptial, post nuptial, cohabitation or separation agreement contact our highly experienced Family Law team on 03456 465 465 or email enquiries@rotherabray.co.uk.
Disclaimer: This blog is for information only and does not constitute legal advice. If you need legal advice please contact us on 03456 465 465 or email enquiries@rotherabray.co.uk to get tailored advice specific to your circumstances from our qualified lawyers
