Recent research conducted on behalf of Handelsbanken Wealth and Asset Management, highlights that 89% of 35-54 year old did not enter into a prenup prior to marriage. This figure rose to 99% of all couples aged over 55. Interestingly, nuptial agreements were more common amongst younger couples tying the knot. A link to this report can be found here.
Given reports by many family law solicitors that prenup and postnup agreements are increasingly popular, these figures are perhaps surprising.
The research reports that the most common reason for not considering a nuptial agreement was that they saw no risk of separation in the future. 17% of those surveyed said they planned to share all of their assets equally on separation regardless of prior ownership, whilst 16% commented that they were not concerned about the division of assets at all.
Overall, it appeared that one in 10 couples had never heard of a prenup.
What is a nuptial agreement?
A nuptial agreement can either be entered into before a marriage (or civil partnership) and is called a prenuptial agreement (or prenup), or alternatively afterwards (when it is known as a postnuptial agreement, or postnup). Prenups and postnups are essentially the same thing.
A nuptial agreement is a formal agreement recording which each party brings into the marriage and setting out what each should receive if the relationship were to break down, ensuring that both parties’ needs are met. Agreements are not strictly binding in England and Wales, but do carry significant weight if they are executed correctly.
Sometimes one or both of the couple want to ring-fence particular assets from those that would be shared on divorce/dissolution, for example gifted or inherited wealth, or an interest in a family business, which would be handed down to the next generation.
It is common for nuptial agreements to limit the financial claims of the financial weaker spouse/civil partner to what is required to meet their reasonable needs, rather than them being entitled to an equal share of marital property.
Who can have a nuptial agreement?
Any couple who are getting married or entering into a civil partnership can have an agreement setting out their financial wishes on divorce or dissolution. They are not the preserve of the rich and famous.
It is most common to have an agreement where either or both parties have assets they wish to protect or have certainty around should the worst happen. The reality is that anyone who owns property, has business assets, or has pension or trust assets may benefit from such an agreement. Nuptial agreements are also likely to be of particular benefit where a party has been divorced previously, has inherited or will inherit family assets. An agreement can protect these assets and preserve them for future generations.
Whilst a nuptial agreement is not romantic, there are significant benefits. An agreement can provide protection, peace of mind and it can provide certainty which in turn makes any future divorce or dissolution easier. Nuptial agreements are now much more freely discussed and accepted in society by couples of all ages.
Nuptial agreements are complex and there are strict criteria that must be followed to make sure your agreement is entered into correctly. Our expert team at Stephens Scown can advise and prepare a nuptial agreement for you, or advise you on an agreement that may have been prepared by your spouse/partner. Please do get in touch for further information on 0345 450 5558 or enquiries@stephens-scown.co.uk