Thursday, 13 September 2018

What you should know About Prenuptial Agreements



There was a time when marriages only took place in churches and registry offices. But with time they slowly moved out and people started getting married on beaches, in submarines and even space museums. Along with the venue, many things have changed about the concept of marriage in recent few years and a pre-nuptial agreement is one such change.

The general attitude of people has not only changed towards marriage but also towards the way they manage their personal finance in matrimony. For this reason, pre-nuptial agreements have gained in popularity and in this article we take you through the various aspects of pre-nuptial agreements.

What is a Prenuptial Agreement?

A prenuptial or premarital agreement is a written, formal agreement between married partners which is signed prior to their marriage. This document establishes ownership of each asset, property and money that they individually or collectively own. It also explains how the assets should get divided if the partners divorce each other in the future.

Are Pre-nups Legally Valid?

Prenuptial agreements were not acknowledged as a legal document in British Courts until the case of Granatino v. Radmacher was presented before the judiciary. Radmacher, heiress of a fortune worth £106m, was initially ordered by the judiciary to pay Granatino £5.5 million as compensation. Radmacher appealed to the court that a prenuptial agreement had been signed between them which clearly stated that no person would benefit financially if the marriage breaks. The compensation was then reduced to £1 million and this was the first time a prenuptial agreement had any impact on a legal judgement.

They are still not legally enforceable but if certain precautions were observed when the prenuptial agreement was drawn up and signed, they may be taken into consideration by the British judiciary.
The decision of a British Court relating to financial settlement after divorce can be quite unpredictable. In 2016, a judge ordered the ex-wife of a top vet to get a job instead of asking for more maintenance from her ex-husband. In another instance, a man was ordered to pay a greater amount of maintenance to his ex-wife after almost 15 years of divorce.

This inconsistency of judgement makes it difficult for us to predict which spouse the judiciary would favour if a divorce case is presented before it. The only way in which one can effectively protect personal assets that one owns despite their marriage falling apart, is to sign a pre-nuptial agreement.
However the validity of a prenuptial agreement can be challenged if it is found to be unfair towards the children of the marriage.

Why Prenuptial Agreement can be a good idea?

In today’s world each of us has a different attitude towards the spending and saving of money. Money can also serve as a motivation to get married and also to get divorced as there are benefits involved in both.

Signing a prenuptial agreement prior to marriage can offer peace of mind to those getting married that their assets will not be split in an unjust way which is against their wishes. Thus it offers them a lot of security in marriage.

Entering into a prenuptial agreement can be a good idea if the following conditions are applicable:

Ø  There are properties or assets involved in the estate which can be complicated to split equally
Ø  You wish to make provisions for your children from a previous marriage
Ø  You wish to protect assets or money that you received as inheritance
Ø  You are expecting an inheritance in the future and wish to safeguard it
Ø  You wish to have some authority in resolving financial issues in the event of a divorce
Ø  If you own a business which you wish to retain control over after getting divorced
Ø  If your partner has debt and you wish to protect yourself from becoming liable to pay off the debt

What should you include in a Prenuptial Agreement?

Prenuptial agreements do not usually have a template structure but are modified to suit the specific needs of each partner involved in a marriage. However, there are certain elements that remain consistent across prenuptial agreements and these include the inventory of assets owned and also the way in which those assets must be handled in the event of the marriage breaking apart.
It can also contain details of the desired financial agreement post-divorce especially in cases where children from previous marriages are involved.

The Checklist

Taking the following measures increases the possibility of a prenuptial agreement being considered as a legal document in court:
Ø  The Prenuptial agreement must be drafted by a qualified solicitor to ensure that it complies with UK law
Ø  Separate solicitor should be appointed for each party to make sure that there is no conflict of interest later on
Ø  Both parties involved must completely understand and willingly accept the terms and conditions laid out in the agreement prior to signing it
Ø  Both solicitors should be able to testify in court that each party was perfectly aware of which document they were signing and the kind of agreement that they were entering into
Ø  The agreement must be signed at least 21 days before the marriage takes place
Ø  Both parties must list each property or asset that is owned by them

Signing a Prenuptial agreement can offer you the financial security which is often put at risk when a divorce is being finalised. But having a prenuptial agreement doesn’t mean you shouldn’t have your own Will written. After all, writing a Will using a Will template may prove to be easier than getting your to-be spouse to sign a prenuptial agreement.

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