Although not yet legally binding in England and Wales, a nuptial agreement is likely to be upheld if:
- You fully understand the document you are signing;
- You have shared full details of your finances with each other;
- You each have independent legal advice;
- You have not been put under any duress to sign it, from your fiancé/e or anyone else.
In this article, Senior Associate Solicitor Sally Ward, explains in detail what's included in each of these essential points.
Understanding the nuptial agreement
This includes the rights that you may be surrendering by signing the agreement, any assets that are being ringfenced either for you or your fiancé/e, its' advantages and disadvantages and the fact that you are likely to be bound by the terms of the agreement if you have to rely on it.
To fully understand the implications of a nuptial agreement, you need an understanding of how things would look if you were to get divorced without a nuptial agreement. Each of you would be required to disclose all your finances to the other. The divorce settlement would be based on the value of all the assets in the marriage at the time of the settlement. This would include assets and liabilities in either of your sole names as well as in joint names, incomes and pensions and the starting point for dividing the capital assets is 50/50. There is no automatic right for assets to be ring fenced. In most cases, meeting everyone's reasonable needs, with the needs of any dependent children being the first consideration, is the most persuasive reason for departing from an equal division of your assets. Either of you may also be entitled to spousal maintenance for yourselves, depending on how your income and outgoings compare.
Making sure that you each have full disclosure of the other's finances.
If you are signing a nuptial agreement to give up rights that you would otherwise have had in a divorce, you should do so having had the benefit of all the financial information that you would have had in a divorce. This includes the nature and value of assets and the opportunity to make enquiries about what has been disclosed. The outcome of a nuptial agreement still needs to be fair to both of you and any children if it is to be upheld by a court.
Getting independent legal advice
The Law Commission Consultation Paper 343 considered whether or not to make nuptial agreements legally binding in this country. They have yet to finalise their decision but, as well as full disclosure, each of you getting advice from independent lawyers is one of the criteria that would need to be met for a qualifying nuptial agreement which would be legally binding. The other criteria are that the agreement must:
- be signed as a deed;
- contain a statement signed by both of you saying that you understand that it is a qualifying nuptial agreement;
- be finalised at least 28 days prior to your wedding.
It takes time to obtain full disclosure and advise on nuptial agreements, which are complex and detailed documents, so it is essential that you instruct your lawyer several months in advance of your wedding. No-one wants to be bothering with the unromantic details of a pre-nuptial agreement whilst finalising the last-minute details of their wedding celebrations.
If you have left it too late for a pre-nup, you can always have a post nuptial agreement drawn up after your wedding and the same principles would apply in terms of the essential ingredients.
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.