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Pre-Nuptial Agreements

What is a pre-nuptial agreement?

Pre-nuptial agreements are entered into by couples before getting married, and set out how their finances should be dealt with in the event the marriage breaks down.  These could include the residential home, savings, investments & pensions.

Historically such agreements were widely considered unromantic and the stigma attached to them often put couples off taking legal advice prior to marriage. However, they are becoming ever more popular, with couples opting to regulate what should happen in the unfortunate event of divorce. This is particularly so if one party is bringing considerable wealth or an inheritance into the marriage.  Final salary pension schemes are also lucrative, and need protecting in the event of a breakdown in your relationship.

It is even possible to enter into an agreement after the marriage has taken place – known as a post-nuptial agreement.

Is a pre-nuptial agreement binding?

Although a pre or post-nuptial agreement is not binding, they can have considerable influence on the courts if a dispute later arises. The courts still have the final word as to how assets should be divided upon divorce, and can depart from any agreement the parties reached. However, in October 2010 the Supreme Court considered the case of a pre-nuptial agreement and decided that they should give effect to an agreement that is freely entered into by each party with a full appreciation of the implications of the agreement, unless in the circumstances at the time of the divorce it would not be fair to hold the parties to their agreement.  In other terms, as long as the agreement is written in a manner which is legally sound, and does not take unfair advantage, the Courts will take a more favourable view on these agreements.

Wealth protection

For a pre or post-nuptial agreement to carry weight, and to maximise the chances of it being upheld the parties should:

  • Take separate  legal advice upon the terms of the agreement, before signing it so that they fully understand its implications.

  • Exchange full and frank disclosure of their financial position at the time the agreement is entered into.

  • Enter into the agreement of their own free will.  

  • Obtain legal advice and enter into the agreement well before any marriage takes place.

  • Ensure that the terms of the agreement take into account all of the parties’ and the children’s future needs.

The law relating to pre-nuptial agreements is a complex area and is still evolving, with agreements being tested by the Courts. It is essential to take legal advice from a specialist family law solicitor upon any agreement you reach with your partner.

For pre-nuptial agreements entered into before the Supreme Court decision of October 2010, you are well advised to take further legal advice to ascertain whether there is anything further you can do to create an agreement that it is likely to be upheld.  Call us on 0121 3550011 for further information.

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