There has, in the past, always been no choice when electing the status of marriage, but to accept the package of legal consequences. This has changed in recent years.
It is important to be aware that in the event of a marriage or civil partnership breakdown financial exposure, legal costs and stressful litigation can hopefully be avoided, by the existence of a prenuptial contract or postnuptial contract.
This is of particular importance because in Family Law the redistribution of assets is a discretionary area of law when dealing with divorce or separation.
Who should have a prenuptial/postnuptial contract?
- Who should enter into a pre or postnuptial
agreement?
Prenuptial agreements should be entered into by anyone who feels that 50/50 as a starting point for the redistribution of assets upon the breakdown of the marriage would be "unfair".
Postnuptial contracts are particularly helpful in sometimes saving the marriage. It also takes away any illusion as to what either party will end up with upon dissolution of the marriage. - What is a prenuptial agreement?
It is a contract by which parties prior to marriage or a civil partnership seek to regulate their financial liabilities and responsibilities to each other in the event of divorce. - What is a postnuptial agreement?
It is a contract by which parties who are married or who are in a civil partnership regulate their financial affairs.
This contract does not have to be entered into because there are difficulties in the relationship. It can be entered into at any time. - Requirements for a prenuptial contract
The paramount requirement is that it must be as "fair" as possible. The parties must be independently advised as to the meaning and implications of the terms of the agreement, including advice on the enforceability of the agreement.
The parties should have the opportunity for proper negotiations and should sign the agreement willingly.
The agreement should be signed 21-28 days prior to the marriage or civil partnership. If it is not, the contract should also be signed postnuptially. There must be full and frank disclosure by each party of all aspects of their financial affairs.
Any non-disclosure will leave an agreement highly vulnerable to being discounted by a court considering its terms in any future divorce in which the agreement is challenged. The usual advice that is given in this regard is to provide as much information regarding disclosure as possible and that the disclosure needs to be recorded as having been disclosed.
In deciding whether the agreement is "fair" consideration is always given to whether the parties' needs are provided for.
If there are children born of the marriage one must not lose sight of the fact that the first priority must be given to the needs of any children or any potential children of the family. The prenuptial to this extent needs to provide for housing as any monetary award is dealt with by the CMEC (formerly the Child Support Agency).
What usually occurs is for the legal practitioner to record the advice in writing. Solicitors also sign the adviser's certificates to this effect which is usually attached to the agreement.
It has been suggested that a vague clause might render the whole agreement void therefore particularity is required.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
